Toyota is Latest Car Maker Hit by Strike in China (Updated)

From the Associated Press:

Toyota Motor Corp., the latest automaker to be hit by a strike at a China parts supplier, said Thursday its car assembly operations were not affected by the short-lived dispute.

The strike comes amid mounting concern over signs of increasing unrest among the migrant workers who are the backbone of the country’s industrial sector.

Niu Yu, spokesman for Toyota China in Beijing, said the strike at affiliate Toyoda Gosei Co. Ltd.’s plant in the northeastern city of Tianjin, had ended.

“So far, operations of our car assembly plant have not been affected,” Niu said.

In the midst of recent strikes at Honda and other plants, observers have noted that wage increases for China’s workers may mark the end of low-cost labor. From The Guardian:

The Chinese Communist party called on employers to raise salaries and improve training for workers today, as Toyota became the latest foreign firm to be hit by a wave of high-profile strikes.

The People’s Daily, the mouthpiece of the ruling party, warned that the country’s manufacturing model faced a turning point as demographic and social changes slowed the influx of low-cost labour from the countryside.

Coming a day after the premier, Wen Jiabao, made similar comments, the editorial suggests the authorities may be encouraging businesses to restructure the economy by putting less emphasis on cheap exports and more on higher-value goods and domestic consumption.

For most of the past 30 years, China’s economic growth has been fuelled by low-cost migrant labour. This has helped raise national competitiveness, attract foreign investors and keep consumer prices lower across the world. But members of a new generation of migrants are less willing to endure hardship and many have successfully gone on strike to demand better conditions.

China Law Blog, however, takes another perspective on the question of whether global firms will leave China for cheaper labor markets. For more on this question, see “Q+A-Is China finished as a low-wage manufacturer?” from Reuters.

Meanwhile, Bloomberg looks at how worker dissatisfaction has led to a bidding war among firms hiring migrant workers:

A bidding war for workers is heating up among manufacturers in China as a shrinking pool of low-cost labor and rising living costs put pressure on employers to raise wages. Strikes at suppliers have disrupted production at Honda’s four factories there, while Taiwanese electronics maker Foxconn Technology Group said it will double salaries for its lowest-paid workers after at least 10 Chinese employees killed themselves this year.

“I would definitely get another job if I am not happy with the pay increase,” said Du Jun, a 20-year-old worker at the white-walled Honda Lock factory, who moved to the region from his parents’ farm in Guangxi province last year. “There are plenty of factories around here I can get a job from,” he said.

See also “Strike Two” from the Beijing Review.

June 17, 2010 11:50 AM
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