WKSP - The New Cold War — How One Company Is Preparing For Potential Supply Chain Issues Resulting From US-China Tensions
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From Moscow toBeijing, the geopolitical situation today is stark. Chinese leader XiJinping recently met with Russian President Vladimir Putin in Xi’s first meeting outsideChina since the pandemic began — a move suggesting a strengtheningrelationship between the two world powers.
The Ukrainian-Russian war, and the new ColdWar between the West and Russia, have thrown the West intoconsternation. An energy crisis looms over Europe, meanwhile, tensionscontinue to develop in the relationship between the United States andChina. Rifts are growing in the aftermath of House Speaker Nancy Pelosi’s visit to Taiwan,and fears are mounting that Taiwan could become the next Ukraine.
One consequenceof the conflict over Taiwan has been the Chinese withdrawal fromclimate target agreements. Despite the collaboration promised betweenthe U.S. and China at the 2021 United Nations Climate ChangeConference (known as COP26), Pelosi’s early August visit to Taiwanled to China threatening to not cooperate on climate policies —despite producing 27% of global greenhouse gases.
Relationships have also become strained as aresult of accusations of human rights violations and genocide beingleveled against China for its treatment of the Uyghur minority in itsXinjiang region.
Is it Time To Move US Production Out OfChina?
If thecontinued souring of the American-Chinese relationship is not enoughto make foreign manufacturers nervous, there are also signs that theChinese economy is starting to wobble. The bottom is dropping out of the Chinese housing market, presaging a collapsethat could cause tremors reminiscent of the 2008 U.S. housing crisis.Real estate currently accounts for one-third of economic activity inChina — double the share of real estate in the U.S. — and a crisis there wouldcause shock waves across the entire Chinese economy.
What all this means forfuture geopolitical relations between China and America remains to beseen, but it will most likely raise concerns for companies whoseproduction is located in China — with the COVID-19 pandemic havinghighlighted the global supply chain issues that could result fromdisruptions to operations there. Companies ranging from AppleInc . (NASDAQ: APPL) and adidas AG (OTCQX: ADDDF) to Tesla Inc. (NASDAQ: TSLA) and Target Corp. (NYSE: TGT)have large manufacturing facilities in China. With the futurecurrently cloudy, how will investors maintain confidence if thiseconomic and political uncertainty continues?
Many companies are starting to talk about moving back toAmerican soil, with the construction of new factories in the U.S. increasing by 116% in the past year.
Leading The Pack In The Return To USShores
Onecompany in the energy and automotive space that is preparing inadvance and making the move is Worksport Ltd. (NASDAQ: WKSP).Providing solutions in renewable energy, Worksport and itssubsidiaries take their patented designs through production in aneffort to innovate in the energy and automotive industries.
Worksport’ssubsidiaries include Terravis Energy Inc. (Latin for Earth andforce), which produces the Non-Parasitic Electric Vehicle (NPEVTM)charging platform that it hopes will spark interest in the electricvehicle industry. Worksport’s SOLIS (Spanish for sun) tonneau coversfor trucks function as on-the-go solar chargers for its COR batterysystems.
Toprepare for the challenges that could soon be posed for manufacturersin China, the company will soon begin manufacturing its products inAmerica. It purchased a new, 222,000-square-foot facility in Buffalo,New York, recently and plans to have the factory up and running atfull capacity by Christmas.
No matter what happens in the east, Worksport isworking to ensure that it is positioned for continued growth andoperations can continue as usual in any circumstance.
“With all themanufacturing issues plaguing multiple industries today, from supplychain issues to the risk of IP [intellectual property] beingcompromised, on-shoring production to a facility we own is the nextlogical step in Worksport’s growth strategy,” Worksport CEO StevenRossi said.
Excited by the prospect of new jobs and innovative technology,New York’s Empire State Development Acting Commissioner, Presidentand CEO-designate Hope Knight said, “As Worksport’s first U.S.production facility, this project will solidify the company’sinvestment within New York State, help foster innovation and greentechnology and provide the potential for even more jobs in thefuture.”
To learn more aboutWorksport, visit its website .
WorksportLtd. was founded in 2011 with a passion for making products better,simpler, and more beautiful, bringing innovation to an innovation-lessmarket. Starting as a producer of tonneau covers for pickup trucks inthe United States and Canada, Worksport has since evolved to positionitself as an innovator in its space. Over the past 5 years, Worksporthas been working on its hybrid energy system named TerraVis, aportable solar power generation system capable of forming personalmicrogrids for pickup trucks. Developing the technology that makes upthe TerraVis system is the first step in the Company’s strategy toincrease its market share through innovation in the auto forest andclean tech sectors.
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