BEIJING // Workers at another car factory have downed tools over pay, the latest in a string of stoppages to have affected the battered industry in recent weeks. Production of fuel-injection equipment and other parts for the Japanese car giants Toyota and Honda has been halted by a strike at a plant owned by the Japanese corporation Denso in Guangdong province, southern China.
Toyota yesterday said it had shut down production at a car assembly factory in Guangzhou, the capital of Guangdong, because of the problems at the Denso plant, which stopped supplying customers on Monday. The Toyota plant can produce up to 360,000 cars a year, including the smaller Yaris model and the Camry saloon. Vehicle assembly at Honda factories was continuing unaffected, the company said, although it warned production could grind to a halt if the dispute continued.
Yoko Suga, a spokeswoman for Denso, said the striking workers were asking for higher wages and improved benefits. Late last month, four Honda car plants in the southern city of Shenzhen were idled when staff at a gearbox plant went on strike demanding higher wages. They went back to work after being offered 24 per cent pay rises, only for Honda to suspend production again at two factories when a strike was declared at another supplier.
Since then, Toyota has suffered a series of stoppages including one last week at a supplier in the northern city of Tianjin, near Beijing, that makes steering wheels and other components. This dispute was resolved after management at the supplier promised to review pay rates at the factory. Problems in labour relations have also hit other industries in recent weeks. A series of suicides at the electronics maker Foxconn resulted in the company giving workers substantial pay rises.
Staff at some factories have been demanding the right to form unions separate from the government-affiliated associations that some have said do not stand up for their rights. John Zeng, an analyst at IHS Global Insight, said the problems in the car sector were symptomatic of a wider recent trend towards industrial action in China. Low salaries are at the heart of the problem. But Mr Zeng pointed out that major car makers such as Honda could afford to pay more as salaries in China were far lower compared with the global average.
Sales are also booming in the country. Last month, car sales were up 26 per cent compared with the same period last year, while sales of all vehicles, including buses and lorries, jumped 53 per cent. "It's quite easy for them to solve these problems," Mr Zeng said, adding that makers such as Honda should be able to increase salaries "without much effect on their profit". Similarly, Li Wei, an economic analyst at Standard Chartered in Shanghai, said he did not expect labour disputes to have a significant effect on China's continuing economic growth. "I think the government will keep an eye on these events. [So far] most of the leadership in Beijing still think the labourers are right," Mr Li said.
A number of factors have been cited by experts as prompting the demands for better wages in the southern manufacturing heartlands, including high inflation and improved employment opportunities in the inland provinces that have prompted some migrant workers to return to their homes to take up jobs. @Email:business@thenational.ae
