Vol. 74/No. 23      June 14, 2010

Reuters/Bobby Yip

Auto workers in Foshan, China, May 31 outside Honda Auto Parts factory clash with officials of government union federation who came to urge strikers back to work.

About 1,900 workers at the Honda Auto Parts plant in the southeast coastal city of Foshan in Guandong Province walked off the job May 17, demanding higher wages. After returning to work briefly, workers rejected the company’s offer of a 55-renminbi ($8) monthly increase and resumed their strike May 21.

“Regular” workers make about 1,540 renminbi per month ($225). At the lowest end of the pay scale, several hundred “interns” are paid a few hundred renminbi monthly as a “living allowance” with no social security benefits.

Workers went on strike demanding wage increases of more than 50 percent, about 800 renminbi.

Other demands included annual wage increases and annual raises. The city’s legal minimum is 920 renminbi.

Work resumed at the plant June 2 amid government pressure and a company offer to raise wages by 24 percent. Negotiations are ongoing.

Workers are in a relatively good position to wrest gains. The strike coincides with a labor shortage in the region and comes just as Honda announced plans to increase its annual productive capacity from 650,000 vehicles to 830,000 over the next year and a half in response to expanding domestic demand. Last year China became the world’s biggest auto market, with more than 13.6 million automobiles sold.

The parts plant feeds Honda’s assembly plants, which, like the rest of the industry, have adopted a “just in time” mode of production—a method that has become a standard manufacturing practice as increasingly stiff competition has driven companies to find every avenue for shoring up their declining profit margins.

Strikers have leveraged this as well. A shortage of engine and transmission parts immediately halted work at two Honda assembly factories. Two other assembly plants were forced to shut down May 26. Three of the four operate as joint ventures with Chinese companies and supply autos for the domestic market.

The workforce is largely in their teens and 20s, the Times said. They work 72-hour weeks with one day off. Like many other large factories, they are housed in company dormitories and eat in company cafeterias.

The strikers organized themselves independent of the official and only legal All-China Federation of Trade Unions. The government labor federation has functioned as a government intermediary.

As the company made its 24 percent increase offer, local officials sent trade union officers to the plant June 1 to urge strikers back to work, government sources told Xinhua. While many workers reportedly left the picket line, union officials scuffled with dozens of workers at the factory.

Representatives visited several plants June 3 to apologize for the scuffle, reported state media.

During the first week, the strike against the Japanese auto giant was given unusually prominent and somewhat favorable coverage by state media, but then receded in the last several days. A lead editorial in China Daily May 28 faulted government ministries for dragging their feet in coming up with a promised amendment to the federal wage laws.

The coverage reflects a debate within the government and Communist Party on wages, according to the Times, with some arguing that higher incomes for workers will help pacify unrest and boost economic growth by expanding the domestic market.
 
 
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