Chris White Online

Dear Friends,

This is an interesting commentary on the spate of strikes traversing across China’s auto components industry.

Apparently, there has also been a strike at a Toyota plant.

Don Sutherland
Australian Manufacturing Workers’ Union

http://www.autonewschina.com/en/index.asp

Automotive News China
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COMMENT

A tip for executives: It’s time to communicate with your workers

Yang Jian

SHANGHAI — Why do workers strike? Well, most of the time they do it for better pay. But when workers at the Honda transmission plant in Guangdong province staged a walkout three weeks ago, they made one extra request.

In their negotiations with the plant’s management, the workers demanded an opportunity to learn Japanese so that they could talk to the management who are mostly Japanese nationals.

Here is a lesson for Honda as well as other foreign auto companies operating in China: establish an effective communication channel with your workers, which will help your company reduce the chance of being caught up in wildcat strikes.

After opening itself to the outside world in the late 1970s, China has done a fabulous job in attracting foreign investment. In addition to cheap land and low taxes, foreign companies are attracted by China’s cheap and non-unionized labor.

Beijing’s ban on independent labor unions has made it easy for the management to reject individual worker’s requests for pay raises.

But it also deprived management of an effective communications channel with workers.

But why were the three Honda factories the first Chinese auto plants to experience work stoppages?

Prior to strikes, they only paid their workers 1,000 to 1,500 yuan ($146 to $220) per month.

By contrast, American and European suppliers in coastal China pay nearly twice as much. This is the main cause of the strikes.

But a lack of communication between the management and the workers also helped trigger the walkouts.

Before the strikes, there was virtually no communication between workers and their employers. That resulted in a high turnover rate, and workers who stayed felt mistreated.

Once the strikes began, the official union was unable to negotiate on the workers’ behalf because they had no credibility.

During the walkout, the local branch of the All-China Federation of Trade Unions sent 40 members who were supposed to act as mediators. Instead they clashed with the strikers, who believed they were trying to force them back to work.

Honda didn’t make much progress until Zeng Qinghong, president of Honda’s joint-venture partner Guangzhou Automobile Industry Corp., offered to mediate. Zeng, a straight-talking executive, prodded workers and management to reach a compromise.
After suffering three wildcat strikes, Honda finally has recognized the need to improve employee communications.
“We need to have more opportunities for managers to listen to employees regularly,” Honda company spokesman Yoshiyuki Kuroda told Bloomberg News. “Without a system in place to communicate with individual workers, the company was unable to predict that strikes were coming.”

It is time for other companies to heed this message and reach out to their workers for communication.

Pictured:Yang Jian is managing editor of Automotive News China.

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BEIJING, June 17 (Reuters) — China must lift the incomes of workers to protect stability, the country’s top official paper said on Thursday, after the latest in a series of labour disputes briefly closed a supplier for Toyota Motor Corp.

The Toyoda Gosei plant, in the northern port city of Tianjin close to Beijing, was shut down on Tuesday by a strike but employees went back to work the next day after managers agreed to discuss wage increases, a company spokesman said.

The firm, 43 percent owned by Toyota Motor and a supplier of items such as door components for compact cars, has not fallen behind its production schedule because it cancelled a holiday on Wednesday, the spokesman said.

A Toyota Motor spokeswoman also said her company keeps some spare parts in inventory to allow it to cope with unexpected situations at its main auto plants in Tianjin.

A rash of walkouts in recent weeks has paralysed several factories across China.

The unusual display of worker assertiveness is sensitive for the ruling Communist Party, which fears movements that could undermine its legitimacy or grip on power.

The commentary on treatment of migrant workers in the People’s Daily newspaper, which acts as a channel for government thinking, did not mention the strikes.

But echoing comments by Chinese Premier Wen Jiabao earlier in the week, its author said the time had come to narrow the gulf between rich and poor, which it added was stifling consumer demand.
The “made-in-China” model is “facing a turning point,” said the newspaper. It urged improved conditions for the migrant workers whose cheap labour has powered China’s export-led growth.
“What is important is achieving a relatively big improvement in the lives of ordinary people, especially wage labourers and their families,” added Tang Jun, a social policy researcher at the Chinese Academy of Social Sciences, a government think tank.
Also on Thursday, a branch of U.S. fast food restaurant KFC signed a collective labour contract in which it agreed to raise minimum wages by 200 yuan ($29.27) a month, as demanded by a local trade union, the official Xinhua agency said.

SOUTH CHINA WOES

The highest profile stoppage has been at a factory in southern Guangdong province that makes locks for Honda Motor vehicles, where hundreds of employees have returned to work after days of protests, pending an outcome from wage negotiations on Friday.

The sympathetic account of worker grievances in the state media suggests that Beijing wants to avoid outright confrontation with the workers and may welcome some concessions.

This week, Premier Wen also urged better treatment of the nation’s many millions of migrant labourers.

He told some of them that “all parts of society should treat young migrant workers as they would treat their own children”.

The strike at Honda Lock was the third to hit a Honda parts supplier in China in the last few weeks.

The other two strikes, at suppliers producing transmissions and exhausts, were settled after workers received pay rises.
The unrest has raised questions about the future of low-cost manufacturing in China, although analysts say there is little danger of it sparking a more powerful workers rights movement.

“There is a small risk that such disputes could spiral out of control, but an even smaller risk that they will lead to wider political instability,” Eurasia Group analyst Michal Meidan wrote in a recent note.

The People’s Daily said that as China’s supply of young, cheap workers from the countryside tightens, the country must focus on improving skills and shifting to service jobs.

That shift will also require giving workers thicker pay packets to spend on consumption and services, said the paper.

Toyota resumes China plant output as strike ends

Automotive News China

TOKYO/ZHONGSHAN, June 19 (Reuters) — Toyota Motor Corp avoided a prolonged suspension of production at its main Chinese car factory when a strike at a plastic parts supplier was settled on Saturday.

The management offered additional benefits but no extra wage increase.

The stoppage for most of Friday at Toyota’s joint venture factory in Tianjin, near Beijing, was the latest in a series of disruptions across the country caused by labour disputes.

Widening discontent among an estimated 130 million strong pool of migrant workers, whose toil has powered China’s growth, threatens to undermine the government’s legitimacy and erode the nation’s competitiveness as a low-cost factory hub.

Toyota said its Tianjin factory, held jointly with Chinese carmaker FAW, would resume output on Monday after the strike-hit Toyota-affiliated parts maker, Toyoda Gosei Co, said it reached agreement with workers.

Toyoda Gosei spokesman Shingo Handa said workers agreed to accept management’s offer of extra allowances for perfect attendance and summer heat. This was on top of an original 20 percent wage increase following a scheduled, annual pay review.

“The settlement did not include any wage increase on top of what was originally offered,” he told Reuters by telephone.

Handa said the plant would operate on Sunday — usually a day off — to make up for the production lost late last week.

Workers at a Honda Motor auto parts plant in southern China also showed up for work on Saturday apparently ready to accept a new pay deal to resolve a week-long strike.

“We’re tired of all this tension,” said one young woman who was among hundreds streaming to work at the Honda plant.

“We just want to go back to work and see what happens.”

HONDA HIT

A Honda spokeswoman said yet another strike had hit a supplier, this time affiliate Nihon Plast Co whose plant in Zhongshan was affected on Thursday.

Production at the factory, which makes plastic parts such as steering wheels, had resumed on Friday but negotiations between workers and management are still going on, Honda said.

The Nihon Plast factory also supplies steering wheels and airbags to Nissan Motor Co but a spokesman at Nissan said there had been no impact on its car production.

China’s leaders, who are obsessed by stability but also say they can ensure a better life for those at the bottom end of an expanding rich-poor gap, have muted coverage of the unrest in state media while expressing public support for workers.

A strike also began late last week at a brewery partly owned by Danish brewer Carlsberg in the southwestern city of Chongqing but the company said the workers had returned to work on Friday evening.

China's workers protesting