By on May 27, 2010

From Reuters to The Nikkei [sub], the world is abuzz with the shocking news that Honda had to shut down assembly lines at all of their four Chinese auto assembly plants after workers at a Honda transmission factory in Foshan in southern China walked off the job. While the job action barely registers in the Chinese press, my phone in Beijing rings off the hook. Common question from abroad: “Are they allowed to do that?” There goes another myth.

Before we get to that, the facts: Monthly salaries for factory employees at the transmission factory average 1,500 yuan ($220). The workers want something between 2,000 yuan ($300) to 2,500 yuan ($370) a month, same as what the folks at Honda’s auto assembly plants receive.

On Monday, talks between workers and management broke down. Workers walked. With just-in-time production, the effects were immediate: Honda had to send Monday’s night shift home at their Zengcheng plant (Accord) and at a plant in Huangpu. Yesterday (Wednesday) night, the Honda factory in Wuhan, which makes the Civic, ran out of transmissions and was shut down.

As of this Thursday afternoon in China, all Honda factories remain closed with no end in sight. The Nikkei [sub] said this afternoon that Honda has no plans to obtain transmissions from Japan. A signal that Honda wants to play hardball: If the workers in the transmission plant strike, jobs elsewhere are imperiled.

Now, back to the question. Are Chinese workers allowed to strike? It may come as a surprise to some that strikes are a common occurrence in China. Slavery has been abolished long ago, and you can’t force someone to come to work. China is a signatory to the International Covenant on Economic, Social and Cultural Rights, including the right to strike. As long as workers walk off the job, the only recourse a company has is to fire them for breach of contract. Oh, yes, they must have a work contract by law. Hire and fire just like in the U.S. is against the law.

Militant picketing, Teamster’s style, blocking of plant entrances and so forth would fall under “illegal assembly to break the public peace” and can attract police action. Which doesn’t mean that strikes are always peaceful. Last year, rioting steel workers killed the manager of a steel factory in Jilin, then attacked the police. A factory that made Nerf toys for Hasbro was ransacked by laid-off workers after they had overwhelmed security guards and police. A Philips factory needed the protection of riot police after 1000 workers went on strike. Chinese workers learned from their French colleagues: Taking managers hostage is a common occurrence. No wonder that a little strike at a transmission factory doesn’t get much traction in the Chinese media.

As far as Honda goes, this is the third strike they had in China this year alone. The car market is surging, the workers want a piece of the action. Possibly, enough to buy a car. As China’s economy grows, the oversupply of workers has lessened. Massive government infrastructure projects gave jobs to workers back home in the hinterlands, which lowered the supply of migrant workers.

Not everybody is happy about this. As Tokyo is getting ready to go home this evening, The Nikkei [sub] muses: “In China, mounting worker frustration over pay levels and working conditions is disrupting the operations of Japanese carmakers, who are growing concerned that they might be unable to keep pace with wage increases.”

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28 Comments on “Striking Workers Shut Down Chinese Honda Factories: Where Is Slave Labor When We Need It?...”


  • avatar

    With inflation causing high home prices and rising food costs in China there is NO WAY, China’s slave labor is going to stay slave labor. Eventually they are gonna take pages out of American history and put together strong unions…then the corporations abusing them will be right back to square one.

    • 0 avatar
      AJ

      Strong unions… Is that what we call them now here in the U.S.? Ha ha! Gangsters more like it. Plus I’d rather have corporations then communists, which hopefully they’ll figure out for their own good.

    • 0 avatar
      L'avventura

      China already has strong unions. In fact, the strongest, the ACFTU (All-China Federation of Trade Unions) has membership larger then most countries; almost 200 million union members.

      Moreover, the union has strong ties with the communist party; which means you don’t mess with them in China. Let’s put it this way, Chinese Walmarts are unionized, American ones aren’t.

      The difference is that Chinese unions and the Communist party know basic economics, a sudden spike in labor costs means that manufacturers will move to sources of cheaper labor like South East Asia, India, Indonesia, or Bangladesh. The trend of unskilled labor is to move downwards, and China wants in the long-term more higher-paid, higher-skill workforce.

      For now, fortunately for China, countries that undercut them in wages like Thailand have had political instability (which I’m sure we’ve all seen in the news) which make them a riskier investment. And risk is money.

  • avatar
    windswords

    Strinking? So they are striking and stinking at the same time?

  • avatar
    tsofting

    Love your headline :-)!

    I’d say the Chinese made a major mistake when they stopped rewarding their workers with maggot-infested rice accompanied by quotations from The Chairman! You give ’em your little finger, and they will tear your arm off at the shoulder!

  • avatar
    John Horner

    ” …. might be unable to keep pace with wage increases.”

    Yeah, it is hard to make money when you pay workers over $200 per month!

    • 0 avatar
      wsn

      FYI, Chinese domestic production Camry (or insert any other applicable car) costs 60% of an imported JDM one. Will GM cars cost 60% of today’s price if their workers are paid $200 per month? It’s still hard huh?

      So yeah, if they pay more to the workers, they may lose money.

      BTW, for your reference, that’s about the starting salary of a new graduate from a 2nd tier university right now. A new graduate from a 1st tier university typically makes about 50%~100% more in the first year.

    • 0 avatar
      TrailerTrash

      LOL!

      Pretty funny, John.

      First, IF the government did not sanction this walk out, it wouldn’t happen…at least not for very long.

      Bertel, try as you might to get us to believe in the modern freedom state of China, just give it up.
      I for one cannot fall for this.

      In fact, the salaries you list make a laughing stock out of the entire economy.
      There are really rich companies and people in China.
      But that’s where the money will stay.
      But it is still a mightily controlled society. The companies are partnerships with the government.
      If not literally, then similar to the partnership you used to be offered from the pin striped suits in Chicago.

      Give me a break!

    • 0 avatar
      John Horner

      “BTW, for your reference, that’s about the starting salary of a new graduate from a 2nd tier university right now.”

      Which, by the way, makes a mockery of China’s Yuan-Dollar currency peg. One of the secrets of the industrial rise of China is that the government sets the exchange rate with the dollar arbitrarily.

    • 0 avatar
      wsn

      Which, by the way, makes a mockery of China’s Yuan-Dollar currency peg. One of the secrets of the industrial rise of China is that the government sets the exchange rate with the dollar arbitrarily.

      Wrong again. Their salary is low due to the social structure, not due to the valuation of the RMB.

      If you look at the price of a JDM Camry (400k RMB) or a nice apartment in Beijing (10M RMB), you would know that RMB is not under-valued. I would say it’s over-valued.

      You see, if a government wants to hold it’s currency low, there is no need to do a peg-exchange rate. Just f*cking print more money, as Obama did. Such a peg would be useful, if the government actually wants to artificially uphold the value of its currency, as seen in PRC and the former USSR.

      A question, if Americans truly believe that RMB have more value than officially claimed, why don’t they accept RMB in Chinese import/export deals?

    • 0 avatar
      wsn

      TrailerTrash:In fact, the salaries you list make a laughing stock out of the entire economy.
      There are really rich companies and people in China.
      But that’s where the money will stay.

      1) That is a good description.
      2) Yes, you can walk off your job in China, at least in a JV or privately owned company.
      3) The ruling class made sure the class disparity stay, mostly not by forbidding people to strike, but by printing money non-stop. That’s why I am always bearish on RMB.

  • avatar
    YotaCarFan

    “BTW, for your reference, that’s about the starting salary of a new graduate from a 2nd tier university right now.”

    From an American perspective, $220/mo sounds like a very low salary. However, if these assembly workers are being paid salaries commensurate with those of white collar workers fresh out of college, then is it accurate to say their standard of living is pretty good in the context of what’s typical in China? Of course, here in USA we pay our autoworkers a salary I myself didn’t earn until after working about 10 years as an engineer, so maybe the Chinese are using our wage parity as a reference point :)

  • avatar
    silverkris

    Well, I’d question whether China has “strong unions” in the Western sense of the word. China does have trade unions, and pretty much most if not all workers belong to one. However, these so-called unions are NOT generally independent of the government and/or Communist Party – and in fact, the trade union organizations are used by the Communist Party as a vehicle of control.

    So for the most part, they are pretty compliant.

    Now, workers in China are like any other workers elsewhere – if they feel that they’re not being treated fairly, and the powers that be aren’t responsive to their needs, and they have no other recourse, they will response with pretty drastic, even violent measures. Unfortunately, with the Chinese governmental structure not really allowing for channels of recourse, workers who feel really put-upon by the bosses will at times resort to drastic measures. These actions are mostly if not totally independent of any union leadership, which tends to follow the government and the company management.

    Now there’s quite a bit of controversy going on with the suicides of workers at Foxconn, a Taiwanese owned contract manufacturer who builds products for Apple, Dell, and Cisco, at their Shenzhen facilities. Kind of the dark side of Chinese industrialization – stress on workers, who will pull a lot of overtime. Most of these workers in Shenzhen are migrant workers who come from other provinces, and are away from home, so it’s hard for them to cope at times.

  • avatar

    Bertel,

    Any comment?

    From Gizmodo:
    http://gizmodo.com/5542527/undercover-report-from-foxconns-hell-factory

    Chinese newspaper Southern Weekly sent 20-year-old reporter Liu Zhi Yi undercover in Foxconn’s factory in Shenzhen, China. For 28 days, he experienced dreadful conditions that the factory’s 400,000 employees endure, churning out iPods, iPads, and iPhones for Apple nonstop.

    There’s no doubt about it. The Foxconn suicides were caused by job stress. Within half a year, there have been nine suicides attempts with seven confirmed deaths at Foxconn’s Shenzhen factory. In the last month, that number suddenly increased to 30 new suicide attempts, prompting the company to hire counselors and even Buddhist monks to free the souls of the suicidal from purgatory.

    Foxconn is one of Apple’s main manufacturer contractors. Thousands of Mac minis, iPods, iPhones and iPads are assembled daily in the Shenzhen factory, which runs 24/7. The company also produces some products for Intel, Dell, and HP, among others.

    After the sixth suicide attempt in April, Southern Weekly—described by The New York Times as China’s most influential liberal newspaper—sent a young reporter to sneak into the factory as a worker. At the same time, they sent a senior reporter to talk with Foxconn’s executives. Their mission: To discover what’s really going on in that factory, and find out the true reasons behind the suicides.

    During his 28 days of investigation, Liu Zhi Yi was shocked to discover how the factory workers live in a sort of indentured servitude. They work all day long, stopping only to quickly eat or to sleep. They repeat the same routine again and again except on public holidays. Liu surmised that for many workers, the only escape from this cycle was to end their life.

    • 0 avatar

      No comment. You need to ask Steve Jobs or the Taiwanese owner of Foxconn.

    • 0 avatar
      psarhjinian

      Foxconn’s facility is huge. Absolutely huge. Note the mention four hundred thousand people at one facility. It’s not a “factory” in the sense we wunderstand it, but a kind of factory/city complex.

      By that standard, it actually has a reasonable suicide rate.

      That said, labour and human rights still aren’t China’s strong suit, to put it extremely mildly.

  • avatar
    ClutchCarGo

    “Are Chinese workers allowed to strike? It may come as a surprise to some that strikes are a common occurrence in China.”

    It’s one thing to strike Japanese owned Honda. Are they sucessfully striking state owned enterprises? That would be a real test of labor freedom.

    • 0 avatar
      psmisc

      It’s actually the other way around. Strikes at state-owned factories are common, it’s almost a cliche.

      It’s political protests that are outlawed.

  • avatar
    chinaman

    so just out of curiosity, how many of you actually traveled/visited/worked in China besides Bertel Schmitt? Sounds like everybody is a China expert.

    FYI watching news like CNN is not the same as going there for a visit.

    • 0 avatar
      gimmeamanual

      I live here.

      Just because Foxconn is like that does not mean other places are like that. Auto plants, especially foreign JV’s, are pretty nice from what I’ve seen.

      TrailerTrash and others always jump into China threads like a bunch of experts because of the week they spent here in 2006. And they’re generally dead wrong, but won’t respond when called out on it. The same people who cling to the “Chinese hate Japanese stuff” opinion as I’m tripping over Hondas and Toyotas and Hello Kitty.

      It’s sad, really.

    • 0 avatar

      Exactly. With dread I’m watching China’s state-owned CCTV embracing Japanese Kawaii culture: http://english.cntv.cn/20100512/101412_1.shtml

      Soon, Japanese cuteness will drown China.

  • avatar
    porschespeed

    Always amusing, the “I live here, therefore, I am an objective source” scenario.

    While I realize this analysis may sell on Faux News, do keep in mind the rest of us have a brain.

    Faulty logic, at it’s most populist/lowest I.Q.

    Reality is that (comparative) slave labor is still comparative slave labor.

    Sure, there are American businessmen who need to hang for their LCD theories and short-term greed/treason. As well as the government that enabled it.

    China should still be a third-world communist wanna-be, struggling to get money from the IMF players to fund the Three Gorges Dam.

    The average American is guilty for thinking that exploiting (rather) slave labor has no cost. We’ve done this before with Africans; that we haven’t learned anything is our own doing.

    Regardless, at the end of the day, it is kill or be killed. If the US does not shift policy, we are doomed to capitalism – which is to say, a race to the bottom where a very few control the many.

  • avatar

    The people who can claim “I live here” definitely are better informed than people who’s minds are clouded by ideology, and who desperately wish that “China should still be a third-world communist wanna-be.” Well, they won’t grant you that wish.

    If all American companies would listen to you and withdraw from China tomorrow, America would collapse.

    As for slave labor: I just took a lengthy taxi ride that cost me $2. Did I enslave the taxi driver? Taking the subway to any far-away place in Beijing costs me 30 cents U.S., am I exploiting the city?

    I hired a receptionist, university degree, good English, and I pay her $300 a month, because my Chinese at the company say that’s the rate, and she’s happy with it. Are you calling me a slave driver?

    She’s free to go if she wants, and she will if someone pays her more.

    For the most part, the people who use the tired (and wrong) „slave labor“ argument are liars. What alternative do they offer? Pay more so that the exploited Chinese worker has a better life? No. Their alternative is to take the job away from the supposedly enslaved. Whereupon the alleged slave laborers go hungry and die.

    Why not tell the truth? Tell it how it is: “We don’t want the Chinese to get the jobs, we want the jobs in America. Let them eat cake. Or starve.” As this is not politically correct, that slave labor lie is trotted out.

    If you don’t want me to enslave my receptionist, for only $600 monthly wired to my account, I’ll triple her salary. You’ll get a picture and a monthly thank you letter. Any takers?

    • 0 avatar
      porschespeed

      Being “in” any scenario does not grant superior powers of observation – rather, it puts participants in ‘fog of war’ mode. That’s Psych 101, the cognoscenti already know that. The Sarah Palin perspective only works with the left 40% of the bell curve.

      And we ain’t it.

      In the final analysis, the upper 1% of the USA and EU are exploiting cheap labor of the Chinese to their own short-term benefit. Though that may be sell-able as “capitalism”, when the top of the pyramid is making 3000 times what the average worker does, there is a distribution issue that will eventually play out in an ugly way.

      It always has in historical reality, and the only certainty is that history repeats itself.

      As Bertel’s secretary works in an environment 1200/month USD buys an overqualified 747-jumbo pilot, I’m sure she sucks it up for 300USD per month. As the yuan is undervalued to the USD by 40+% according to all easily verifiable estimates, ’tis hardly a level playing field.

      She can’t afford rent unless she has at least 10 roomates, if she wants to eat, that is…

      In a nutshell, Chicom labor standards and relations are where the US stood in the early 1900s – a very few exploiting the labor of the many.

      Sooner or later, the workers tire of living 12 to a room in corporate cities, and lash out against the people who work them 16 hours a day and then over-deduct their paychecks to boot.

      I do hope you are there to experience what you (and the rest of the opportunists) have wrought.

    • 0 avatar
      porschespeed

      Sherman, set the Wayback Machine to 1800…

      I gave that ni**er some food and a shack to stay in for the 100+ hours of brutal labor I got from him last week.

      Did I exploit him?

      C’mon man. Be honest.

      We all know that the Chinese growth machine is benefiting the few on the backs of labor of the many.

      Truth would grant some credibility.

  • avatar
    tklockau

    Hi Bertel,

    I appreciate hearing about China from you, it’s made me more level-headed concerning China and the people who live there. It reminds me of people from the west or east coast, thinking people from Iowa are all farmers-I’m in Rock Island, right on the border with Iowa and Illinois. People from out of town are always suprised we have malls, cities and even Porsche dealers.

  • avatar
    chinaman

    so when god look down from the cloud and see the humans on earth, he said to himself “Oh my! all these people are getting exploited!” They have to eat, they have to sleep, they cant do whatever they whenever they want. Oh no!”

    Seriously, get your foot on the ground and talk to these people and see what they want and what then need. Don’t hypothesize what they want and need.
    Take some time off and travel there. Pick up Chinese and go talk to the common folks and see what they have on their mind. been up on the cloud is one thing, been on the ground is another.

    BTW the 1% thing you said; like the many people from the 99%, every time I walk into Walmart I am exploiting cheap Chinese labor. Its called living with reality.

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