Honda strike is over, workers get back to work with 24% payrise
Whilst their aim of 2,500rmb was not met by Honda management, the strike saw their wages rise from 1500rmb to 2300rmb ($336USD) after a couple of days of strikes, however the strike leaders appear to have been fired by Honda for a breach of contract.
BEIJING—Honda Motor Co. said it has offered striking workers who have paralyzed its car-production lines in China a 24% increase in pay and benefits, a significant concession that highlights the new challenge from organized labor facing foreign investors on the world’s factory floors.
Strikers were pushing for a 53% boost to bring their total compensation package to 2,300 yuan (US$337) a month, according to two strike leaders who were fired by Honda after the walkout began May 17 at a plant in southern Guangdong province, China’s export powerhouse.
A group of Honda interim workers and workers hold a strike at the front gate after walking out from their plant manufacturing auto parts in Foshan at the southern Chinese Guangdong province on Monday.
Nevertheless, Beijing-based Honda spokesman Takayuki Fujii said that “a majority” of the 1,900 workers at Honda Auto Parts Manufacturing Co. accepted the company’s offer and returned to work Monday afternoon, allowing the company to “partially restart production” of transmissions, or engine gears. He said several dozen workers have rejected the offer and are trying to disrupt work at the factory.
Honda now hopes to restart operations at all four of the Chinese joint-venture final-assembly plants that it was forced to shut down last week because of the lack of a key component.
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Now the tip of the iceberg has been breached, how many other FDI companies will be targeted? Surely no SOEs will get to this point…
China is losing the merits of being a low-cost country fast, foreigners will think twice about setting their export production base in China, going to Southeast Asia, India, or even Africa instead.
Foreigners will still come to China for Chinese domestic market, but not to export out of China.
>>>Foreigners will still come to China for Chinese domestic market, but not to export out of China.
I think this is a major goal of the central government, move the economy away from being largely export driven and to centralize internal demand to make it less reliant on export products.
Africa and other countries do not have the capability to produce large quantities of products in a short period of time, while maintaining excellent quality. If they could do it, then the companies would’ve moved away years ago.
@ Ed
> Africa and other countries do not have the capability to produce large quantities of products in a short period of time,
You are underestimating other countries.
> If they could do it, then the companies would’ve moved away years ago.
And they are indeed moving away from China to Vietnam, India, and Sri Lanka.
Here in the US, you see clothing that used to be made in China now being made elsewhere.
But a majority are still in China, few have moved away, by the time they do, China will probably have already shifted from mainly exports to mostly imports, and less exports.
I am not underestimating anyone. China is the best choice right now.
Also note a key point: “while maintaining excellent quality”. Other countries may be able to come close in the quantity factor, but what about quality？
@ CCT
> I think this is a major goal of the central government, move the economy away from being largely export driven and to centralize internal demand to make it less reliant on export products.
I was under the impression that the CCP and Chinese nationalist’s goal was to set up a Chinese automobile export industry that is as strong as Japanese/Koreans?
Rising wages and yuan revaluation doesn’t help to achieve that goal. Are Chinese really happy with being OEM producers for foreign brands like Taiwan and not having any strong Chinese auto brands in overseas market?
If Japan was able to do it, then why can’t China? Pricing is not the only advantage they have.
@ Ed
> If Japan was able to do it, then why can’t China?
Japan has a unique culture of quality not seen elsewhere. You can see Japanese obsession with details even on things like bento boxes. Japanese quality exists because Japanese are hardwired to pursue such quality, not because they think about achieving quality. Quality is in their blood.
You do not see a similar culture of quality in China; instead you see a culture of low price in China.
Like your name, you have strong hostility towards China. As a Chinese, I admit there are still some dissatisfied aspects. However, you could not deny her booming economy. More and more international enterprises have established or are going to establish regional offices or plants there. Are they all blind for all the disadvantages you have wisely gain an insight into?
@ Joy
> Are they all blind for all the disadvantages you have wisely gain an insight into?
I have to say yes.
>Japan has a unique culture of quality not seen elsewhere.
http://en.wikipedia.org/wiki/Edward_Deming
>You do not see a similar culture of quality in China; instead you see a culture of low price in China.
Since you mentioned obsessions and bento boxes and what not:
http://en.wikipedia.org/wiki/Chinoiserie
There are cultures and there are economic realities.
Great links psmic, will have do do more reading on the Deming guy.
IHC won’t like it though, his whole argument is that the Japanese are superior for quality, interesting to know that they were given a big helping hand by a very talented American.
Actually, China’s export quality surpassed Japan and Korea in 2009. So take that and be quiet. Japanese quality is nowhere near as good as it was before, take Toyota for example, whose problems existed as far back as 2000.
What do Japanese bento boxes and clothing sold in the US have to do with the Chinese car industry???
Good to see the workers held out long enough and got a decent pay rise. If Honda had been paying attention in the first place maybe the strike and factory shutdowns could have been avoided.
@ woxihuanpijiu
> What do Japanese bento boxes and clothing sold in the US have to do with the Chinese car industry???
The culture of quality, or the lack of it in China.
Chinese don’t seem to care for quality and it shows in Chinese produced goods and services. It is pretty disturbing that Chinese don’t seem to understand that Chinese product they see lack in quality.
You obviously know NOTHING about China. Your crap is just plain irritating. Do some research and you will see that great Chinese quality existed long before Japanese quality. Quality has always played an important role in China, with companies like Lenovo and BYD, one of the few whose batteries have never been recalled before.
Goods are made to order in China by foreign companies chasing profit so they skimp on quality… It’s not like the Chinese are saying “this is it, buy it or bugger off!!!”
Comparing a $10 T-shirt to a $20,000 vehicle is not really a good comparison………. both of which have nothing to do with the Honda strike being over which is what this thread is about….
@ woxihuanpijiu
> Goods are made to order in China by foreign companies chasing profit so they skimp on quality…
Goods made in China by foreign companies are fine in quality; think iPad and Samsung TVs.
It is goods made in China by Chinese companies that are suffering from quality problems.
> Comparing a $10 T-shirt to a $20,000 vehicle is not really a good comparison……….
Most of Chinese brand cars sold in China are priced under 100,000 yuan.
Best sellers like BYD F3 and Chery QQ are priced 50,000 ~ 60,000 Yuan.
Now, how did BYD achieve 60,000 yuan price tag on F3?
> both of which have nothing to do with the Honda strike being over which is what this thread is about….
Rising salaries in China would drive foreigners away from China, unless they are building factories to sell to Chinese domestic market exclusively.
Lenovo, GiTi, Huawei, DLink, TPLink, Hasee, Winbo, Spinner…. just a few Chinese companies products that Ive used off the top of my head, used them all with no quality issues.
Exactly. I was just going to say that Lenovos made in China have some of the highest quality in the world.
So…….. you are talking about products sold in the China now? If Chinese consumers are happy with what they buy then there seems to be no real problem. If they can afford a “foreign” car then so be it. Many can but still choose to buy a Chinese one. Even buying a car made by a JV is supporting their own industry, workers get paid, money gets spent on other things….. the cycle of life continues
.
It’s highly unlikely that the Honda workers were chasing an extra 1000 kuai a month to put it towards Ipads or Samsung TVs. More than likely they wanted/needed it to support their families and get ahead in life.
Facts speak louder than words, time will tell.