Striking Workers Shut Down Chinese Honda Factories: Where Is Slave Labor When We Need It?

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.”