The Shanghai industrial park where General Motors Corp makes Buick cars and NEC Corp makes computer chips said it may suffer power cuts as the city copes with an electricity shortage during the hottest summer in 60 years.
"The companies in the area have been notified by the city to prepare for power cuts if the power grid is over-burdened," said Li Jinye, a management official at Jinqiao Export Processing Zone (
City authorities have been forced to cut electricity to some areas after demand surged this week to 13 million kilowatt-hours, two-fifths more than the generating capacity of city power plants.
Demand has surged as temperatures reached as high as 40?C in a heat wave that's lasted three weeks. The problem of power shortages and record temperatures is affecting a broad stretch of eastern China.
In neighboring Zhejiang province, where temperatures surged to 43?C last week, power companies are competing with Shanghai for electricity from state-run State Power Grid Co, said Wang Yan, who works at Shenergy Co, one of the three power suppliers in the province.
Hangzhou Demand in the provincial capital of Hangzhou, where Eastern Communications Co makes cellular phones for Motorola Inc, is easing, after a nuclear power station in Qingshan resumed its supply of 300,000 kilowatts of electricity, Wang said.
General Motors, which makes passenger cars with China's biggest vehicle producer Shanghai Automotive Industrial Corp, may face daily losses of up to 180 million yuan if production of its Buick Excelle and Regal passenger cars were interrupted. The figure is based on manufacture of 600 vehicles a day, each with an average list price of 300,000 yuan.
Officials at Shanghai General Motors Co couldn't be reached for comment today. Spokeswoman Song Yun said yesterday that production hasn't been affected, though employees had been banned from using hand-dryers in washrooms to help the company save electricity.
Zhangjiang Park Baoshan Iron & Steel Co (寶鋼), China's biggest steelmaker located in Shanghai, said it faces no problems because it has its own back- up power plant.
SVA Group Co, which makes flat-screen displays for Japan's biggest computer maker NEC Corp, isn't so lucky.
It may incur losses because of disruption to its production caused by the power cut, said the company's product development manager Deng Wenzhi.
"Sometimes it's for a few hours, and sometimes it lasts almost an entire day," he said yesterday. "It is very disruptive. If this goes on next week, we may incur losses."
Zhangjiang High-Tech Industrial Park, where several of China's biggest semiconductor chipmakers are located, said it hasn't been affected by the plan to cut power.
Semiconductor Manufacturing International Corp (
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