Friday, May 28, 2010

Chinese workers on strike at Honda plant

Labour unions going on strike is quite common in India. Just this week, a section of the state run airline, Air India, had gone on strike for two days causing huge disruption, and inconveniencing thousands of passengers. The government responded by sacking dozens of employees, and derecognising a couple of the unions, in an uncommon move.

In China, of course, labour unrest is generally not in the news, and the government rarely publicises such actions. But this time, 1900 workers in a Honda auto component factory about 100 km from Hong Kong, have gone on strike since May 21, 2010. . And this action seems to have affected Honda's assembly line plants in other parts of China. Recently, a few other MNCs have faced labour unrest as well.
The New York Times reported, "Strike Forces Honda to Shut Plants in China" on 27 May 2010.
According to state-controlled Chinese media, workers at the transmission factory earn $150 to $220 a month and are demanding to be paid the same wages as Honda’s assembly plant workers, who earn $300 to $370 a month.
The official China Daily newspaper described the strike at the transmission factory as “the largest industrial action ever reported in China.” More workers have walked out in strikes at other Chinese factories, but the authorities have typically hushed up these events and have discouraged the official press from reporting on them.
Workers have sometimes complained that companies violate labor laws, but the strike in Foshan appeared to be a push to increase wages.
The newspaper cited a municipal official in Foshan as saying that the local government had investigated but had not found labor law violations by Honda at the transmission factory. The minimum wage has nearly doubled in the last five years in the factory cities of coastal China, to about $130 a month in cities like Foshan, with 11 provinces having raised their minimum wages by 10 to 20 percent so far this year.
Another report in the Financial Times, on May 27, 2010, says
The company confirmed that the industrial action had disrupted operations at car assembly plants in Guangzhou, the provincial capital, and Wuhan in central China.
The Foshan facility closed on Monday, with Honda’s three car factories following suit on Wednesday. According to the company, the stoppages could continue into next week, pending a government-led effort to resolve the dispute.
The workers appear to be acting independently and without support from the country’s only officially recognised union, the All China Federation of Trade Unions. “They have organised this themselves,” said an executive at the Foshan factory’s union office, who declined to give his name.
While the ACFTU has been more aggressive in establishing chapters at multinational companies, notably Walmart, it shies away from confrontation with management. The union’s website lists “the building of a socialist harmonious society” as one of its “primary tasks”.
Strikes are also rare at multinationals, which tend to pay higher wages and offer better conditions than their Hong Kong, Taiwanese and domestic counterparts. Jiangsu province began the trend in February when, after a two-year freeze, it raised the officially mandated minimum monthly wage by 13 per cent to Rmb960 ($140). Honda employees in Foshan earn about Rmb1,500 ($220) per month and are demanding an increase to Rmb2,000-Rmb2,500.
Foreign investors are under pressure to increase wages as the country’s manufacturing sector shakes off the effects of the global financial crisis.
Honda is the second high-profile multinational investor confronted by a serious labour crisis in recent weeks. Foxconn, a contract manufacturer for Apple, Dell and Hewlett-Packard, is struggling to contain a spate of suicides at a sprawling plant in Shenzhen employing 300,000 workers.

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