Second strike hits China Toyota supplier

The chance of more industrial action also loomed over a Honda plant in the southern manufacturing heartland of Guangdong, where workers are waiting for a new pay offer later on Friday before deciding whether to resume a strike they suspended on Tuesday.

Spreading appetite for unrest among an estimated 130 million strong army of migrant workers, whose toil has powered China’s growth, could undermine the government’s legitimacy and erode the nation’s competitiveness as a low-cost global factory hub.

Wages only make up around 5% of overall manufacturing costs but other inputs like energy and water are also getting dearer. Some firms are already moving production to cheaper neighbours such as Vietnam or Bangladesh.

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.

Police

Parts supplier Toyoda Gosei said production had stopped since Thursday afternoon at a plant in the northern port city of Tianjin, where it makes parts like instrument panels.

Workers leaving the factory in heavy rain declined to speak to journalists, but a visiting employee of a nearby factory said there was a strike on, and police were inside the plant. Police vehicles could be seen parked inside the factory’s grounds.

A separate stoppage halted work at another Toyoda Gosei plant on Tuesday. While management say output is back to normal after they promised to discuss wages, some workers there have said they are still striking or on a go-slow.

In southwestern Chongqing city, a short strike at Chongqing Brewery Co Ltd ended on Friday after talks with management, said Danish brewer Carlsberg, a part owner of the plant.

Workers feared that a plan by Carlsberg to raise its stake in the firm to nearly 30% would threaten their benefits, a local official told Reuters by telephone.

“There was not good enough communication to the employees about the agreement," said Carlsberg spokesman Jens Bekke.

“They were informed, and now they have gone back to work."

China’s Communist Party mouthpiece, the People’s Daily, this week called for higher workers’ incomes to protect stability, while Premier Wen Jiabao called for better treatment of workers.

The sympathetic, if tightly limited, accounts of worker grievances in state media suggest Beijing wants to avoid outright confrontation with the workers and may welcome some concessions.

Why Japan?

Relations between Japanese auto firms and their Chinese units and suppliers can be more complicated than those of other foreign investors, which may have contributed to making them some of the main flashpoints for unrest in recent weeks, an expert said.

“In our investigations, we consistently found that the most tense relations were with the Japanese and South Korean partners," said Wen Xiaoyi, a researcher at the China Institute of Industrial Relations in Beijing who specialises in labour relations in the automotive sector.

“You find the Japanese and South Korean companies are much more involved in managing production at the factories. Also, they don’t have a tradition of collective bargaining or give-and-take in their Chinese factories," Wen said.

In Guangdong, workers at the factory which makes locks for Honda Motor downed tools last week but agreed on Tuesday to go back to work until Friday on the understanding management would present them with an improved deal on wages and benefits.

Honda’s new package for workers in the lock factory is expected to be presented later on Friday but negotiations between management and employee representatives continued to show signs of strain, workers said, and some are willing to resume striking.

“If it’s not acceptable, we’re prepared to strike again," said one female worker among a largely reticent crowd streaming in for morning shift in the Pearl River Delta town of Zhongshan.

Honda has also been taking dozens of potential new hires to a training centre, possibly hedging against further unrest.

The strike at Honda Lock, which manufactures locks, mirrors and wheel sensors, is the third to hit an auto parts supplier for the giant Japanese carmaker in recent weeks.

Workers at Honda Lock said spreading word of successful strikes at other Honda auto parts suppliers had inspired them to agitate for improved compensation as living costs rise.

Labour relations expert Wen warned more spontaneous unrest could be hard for firms to handle because workers, although extremely discontented, were afraid of putting themselves forward in negotiations with management for fear of repercussions.

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