YST: Casualty of the Mini-Scooter Craze
TAICHUNG, Taiwan (August 3) – The mini-scooter fad has come to an end, and at least one Taiwan manufacturer has been left hurting. The Yu-Sheng Traffic Parts Co., maker of YST brand head sets and bottom bracket parts for bicycles and formerly a maker of mini-scooters, has laid off roughly 90% of its work force […]
TAICHUNG, Taiwan (August 3) – The mini-scooter fad has come to an end, and at least one Taiwan manufacturer has been left hurting. The Yu-Sheng Traffic Parts Co., maker of YST brand head sets and bottom bracket parts for bicycles and formerly a maker of mini-scooters, has laid off roughly 90% of its work force and has been forced to the edge of bankruptcy since mini-scooter demand died suddenly after the 2000 holiday season. Though company officials admit other factors to YST’s financial problems, they claim mini-scooters as the main culprit.
Problems for YST began in February of this year when the company began bouncing checks to suppliers. Then in March, the company had trouble paying employees’ salaries, a problem which it temporarily resolved. The company was wholly unable, however, to pay employees in either April or May and on June 1 laid off all but ten to twenty members of what had been well over a 100 person work force. According to Taiwan media, Ji Ji-sheng, the company’s owner, even staged a fake divorce in an attempt to divert blame for YST’s financial difficulties.
At present, former YST employees have still received no compensation for their back wages, forcing them to express their grievances through a protest in front of the YST factory on July 16. “It’s all because of the mini-scooter,” said one company official. “Our clients bought too many of them, and starting from early this year, they were way overstocked and couldn’t sell them anymore, so they also couldn’t pay us what they owed.” Based on encounters with YST’s suppliers, Taiwan media sources estimated that YST owes in excess of TWD100 million (EUR3.3mn) to suppliers and more than TWD7 million (EUR230,000) to employees in back wages. A sole proprietorship, YST had claimed its total capitalization at USD2.4 million prior to its current financial difficulties.
YST was established more than two decades ago and produces both automobile parts and bicycle parts. Company officials stated that its automobile division was not severely affected by the abrupt death of mini-scooter demand. The company’s bicycle parts division, meanwhile, is “downsizing.”
In addition to the end of the mini-scooter fad, YST officials mentioned a depressed global market for bicycles and a poor Taiwan economy, evidenced by ten year lows in both the nation’s stock market and unemployment figures, as contributing factors to the company’s financial misfortune. (DF)