More worker unrest coming, experts predict

08:17, June 09, 2010      

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Japanese carmaker Honda Motor Co faced a new walkout at one of its parts suppliers in South China, just days after resolving a strike that froze car production at four factories.

The strike by some workers at Foshan Fengfu Autoparts Co in Foshan of Guangdong province began at the first shift on Monday, said company spokesman Keitaru Yamamoto.

Yamamoto, in Tokyo, said the company is still trying to confirm how many workers are involved in the strike and why they walked off the job.

The company is also studying what impact the walkout might have on production, he said.

The strike came just days after Honda resumed production following a two-week strike at a wholly owned parts plant.

That dispute was resolved last week and workers returned to work on Friday after a wage deal was reached, Honda officials said.

Meanwhile on Monday in Kunshan of East China's Jiangsu province, about 2,000 assembly line workers in a Taiwan-funded machinery factory went on strike to ask for better pay and improved working conditions.

Some 50 workers were reportedly injured, five seriously, in a clash between the workers and local security staff who tried to stop workers from protesting in the street.

A female human resource official surnamed Dong, with KOK Machinery, confirmed the incident to China Daily but refused to give details.

Another anonymous official with the company said the factory owner had flown to the factory from Taiwan on Monday night to deal with the walkout.

The latest strikes reflect rising tension between workers and companies, especially those from overseas, that treat China as a source of cheap labor.

The growing labor unrest originating in South China may make wage hikes a trend in the near future, but it might be an opportunity to push local manufacturers to update industry and promote production efficiency, experts said.

"Suicide-plagued Foxconn and strike-bothered Honda resolved their problems by increasing workers' wages. Their methods may set a model for other enterprises facing the same problem," said Wang Shaoqing, deputy general of Shenzhen Association of Arts and Crafts Industry.

The Pearl River Delta region in Guangdong province is a major manufacturing base in the world, where tens of millions of migrant workers from the country's hinterlands churn out goods for top global companies and export-oriented local small- and medium-sized manufacturers.

Zeng Li, an official from the Dongguan branch of the Federation of Hong Kong Industries, said the profit margin for Hong Kong companies in Dongguan is between 10 to 20 percent.

"If labor costs increase, their profit will fall and they may even shift their factories to other countries that can provide cheaper labor," Zeng said.

Some Hong Kong businessmen are considering moving their business to Southeast Asian countries such as Vietnam, due to the rising pressure of higher labor cost in China, he said.

But Wang, from Shenzhen Association of Arts and Crafts Industry, said a massive move of overseas companies from the Chinese mainland to other countries is unlikely.

"Although some other neighboring countries offer cheaper labor, their political and business environments are not as good as China's," he said.

"In addition, the 'Made in China' label has already won recognition in the world market."

Wage hikes are an unavoidable trend, Wang said.

"Migrant workers will go to factories where they can get higher pay and better working conditions," he said.

Foxconn and Honda's wage rises will put big pressure on many small-scale original entrusted manufactures (OEMs) in the region, he added.

Zhang Yansheng, director of the Institute of Foreign Trade of the National Development and Reform Commission, said China's advantage of cheap labor may disappear in 10 years.

Some companies already have found difficulty in hiring migrant workers because their wages are too low.

The call for wage hikes may bring the impetus for OEMs and local companies to make products with more technological contents and added values, and make their production more efficient, Zhang said.

He Dan, Chen Hong and AP contributed to this story.

Source:China Daily


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