Fresh Strike Hits Mainland China Honda Operations
Courtesy of Tyler Durden
Ah, the perils of being a rich communist nation: everyone wants a part of the spoils. South China Morning Post reports that Honda’s mainland China operations have been hit by a fresh strike, this time at the Atsumitec Company in the city of Foshan. The operation began on Monday, with 170 workers striking after management fired about 100, a worker who declined to give his name told reporters by telephone. “The local government has sent police to our factory and will be here in the afternoon,” he said. As SCMP reports, the strike follows a turbulent period in June, which saw hundreds of workers at a number of foreign-owned factories, many of those in the affluent Pearl River Delta, walk off the job demanding better pay. More than anything, the recent bout of strikes, in addition to putting increasing pressure on China’s social tenuous fabric, demonstrate how just-in-time manufacturing, now highly popular among western manufacturers, can put companies at risk because it allows little margin for error when supply chains get disrupted. Should Chinese slave laborers, er, workers, continue aspiring to be able to work for even one fifth of US minimum wage, in their quest to replicate iPad mania so popular in the US, the problems may easily get out of hand. Furthermore, with labor costs rising dramatically, the impact on already tight export margins is going to be severe.
More from SCMP:
The strikes are a symptom of a broader trend that many investors will have to consider: a Chinese workforce becoming more assertive and selective, and sometimes inclined to protest by strikes, slow-downs and, most often, quitting.
“The chance of more strikes increases the more successful the previous strikes are. There’s been more and more communication between workers and advocacy groups,” said Duncan Innes-Kerr, Beijing-based China analyst for the Economist Intelligence Unit.
“The workers have networks to exchange information even when there has been a state media blackout. The example set in one place tends to encourage others.”The wave of current unrest hit a peak in June, but reports tapered off at the end of the month. The last reported stoppage, at Japanese-owned Tianjin Mitsumi Electric, ended on July 3.
Domestic media have been largely mute about the strikes, apparently due to state censorship. But Xinhua has issued reports about the unrest on its English-language service.
Labour costs in China have been rising, partly encouraged by a government that wants to turn farmers and workers into more confident consumers, even as it tries to keep a lid on strikes.
Earlier strikes disrupted production at carmakers Toyota and Honda, and have laid bare the rising demands of China’s 150 million migrant workers, especially younger ones wanting to secure a foothold in urban areas.
Of course, should manufacturers decide to pass through labor costs to end products, coupled with a CNY revaluation, WalMart may just end up being the best short opportunity ever.
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