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Strikes Are Contagious in China; Toyota Is Now Involved

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On: Wed, Jun 23, 2010 at 9:40AM | By: Sherry Christiansen

Strikes Are Contagious in China; Toyota Is Now Involved

It seems that on going labor strike at a Honda auto parts manufacturing plants in China has become all the rage among the media recently, and the latest news is that Toyota is now being affected by the strikes in China as well.

 In the past few weeks strikes have broken out in several of Honda Motor Company’s auto parts manufacturing plants in China, and now Toyota is being plagued by a rash of auto workers going on strike as well.  In fact last week Toyota was forced to shut down operations at their southern China plants as a result of labor unrest.

Walkouts are spreading throughout the Southern China region where last month Honda was forced to raise wages for workers in 3 different auto parts factories in order to end the labor strikes; a sign of China’s diminishing cheap labor force.

According to a Bloomberg Business Week News report, David Abrahamson (Project Manager at The China Center for Labor) stated that higher wages in western providences of China are deterring workers from migrating to the south (where many of the auto parts industries are located), which is causing more and more demand for increased wages in southern industrial regions, such as Guangdong.

Another factor in the strikes is that many Chinese cities and provinces have recently raised their minimum wage requirements by as much as 15.8%. The Chinese government feels that higher income will be an incentive for companies to recruit workers, and the overall result will be an increase in spending which will boost the economy.

The problem is so severe that there are actually some industrial sites in China that are losing as many as 25% of their employees every month as a result of the competition between employers to keep their workers and replace the ones who have jumped ship.

At Guangdong province the Honda affiliate Nihon Plast Co. as well as at the Honda Lock Company, workers have resumed operations after negotiations ceased, and they were offered more money in wages, but according to a Honda spokesperson they are still not completely satisfied. Some experts feelthat with the new outbreak of strikes, workers at plants that have already settledmaywalkout again.

According to a recent Bloomberg News article, workers are quoted as saying, “We’re not happ, but what more can we do?” A 21- year-old woman referring to the strike settlement said, “I’m quite angry. We spent so much time on strike, and we don’t even get 300 Yuan more.”

Toyota closed its Tianjin factory last week as a result of a strike at the auto supplier Toyoda Gosei Co. Workers at another Toyota supplier in China, Tianjin Star Light Rubber and Plastic Co., also walked out this month; a spokesperson from Toyota said the problem was resolved when the company offered a wage increase.

Toyota, who in the past was unscathed by the strikes as far as its stocks were concerned, most recently fell 1.7 percent in Tokyo trading. On June 18, Honda dropped, as well, by 1.7 percent.

According to a spokesperson for a Hong Kong-based advocacy group, who told the Bloomberg News reporters, “When strikes are successful, you do see replica strikes, copycat strikes,” The spokesperson, Geoffrey Crothall, added, “I expect you’ll see more strikes in the coming weeks.”

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