Friday, June 18, 2010

Ryan Pyle Blog: Honda Workers Strike, and the NYT


A few days back there was a workers strike at a Honda car manufacturing plant in southern China. This occurred in late May. Of course thousands of news stories rushed to cover the news, and there was much mis-represented of what was really happening on the ground.

Enter Keith Bradsher and David Barboza. If you don't know who they are, all you need to know is that they are two of the best. Keith and David, both whom I've worked with and have a lot of respect for, are Business correspondents for the New York Times. And they co-wrote an article towards the end of May that I believe cut through and delivered the hard facts about what was happening at the Honda plant in southern China; a story that delivered news and facts that went well beyond that of the other publications.

A few points to keep in mind:

1) Yes, there is a workers union in China. It is considered to be an arm of the Communist Party and is mainly in charge of watching over workers not bargaining with companies for better working conditions. There are no explicit rules about striking.

2) It's true. Nothing in China is allowed to happen without the blessing of The Party. This strike may have first occurred on whim, but it continued because people high up in the food chain thought it was a decent move. Reasons why might include: that it is time for China's manufacturing migrants to earn more income and become part of the consumer economy; that it is time for China's manufacturing class to obtain better working conditions and better workers rights; that China needs to maintain awareness that the gap is growing between the rich and poor; the recent suicides at Foxconn might end up driving home the point that migrant workers in the manufacturing industry are vulnerable and need further employment protection through government regulation; and lastly that Honda is a Japanese company. Had this strike occurred at a GM or VW Joint Venture you can bet it would have been shut down in a matter of moments. There is a still a lot of personal, and government driven, anti-Japanese feelings throughout China.

3) The most interesting point is that this was allowed to carry on for several days. Meaning that there was debate amongst the top leaders about how to address the situation. We are seeing this more often in China; where the leadership is forced to make quick decisions about situations occurring (riots in Tibet / Xinjiang, or workers strikes) and the government goes very quiet, and local officials go in to hiding until they get their directions from higher up the food chain. One of the common mis-conceptions is that the Communist Party is a homogeneous one party entity where people all agree on the same basic plan for country development; well, that couldn't be further from the truth. The "Party" is a mix-mash of people with a mix-mash of ideas and ideals. A friend of mine who has a lot of government dealings told me that for every person in the government leadership who wants China to develop in to a modern economic global powerhouse, there is another person who wants to drive China back in to the Communist dark ages of the 1960s. While I don't know if that's exactly true, it does pose an interesting argument and can be used as a basis for understanding some of the "ying and yang" policy moves that the Chinese leadership continues to pull out of their hat.

The story by Keith and David is below. The link to the original story online is just below. Enjoy the read.

LINK to Original STORY.
May 28, 2010
Strike in China Highlights Gap in Workers’ Pay


FOSHAN, China — After years of being pushed to work 12-hour days, six days a week on monotonous low-wage assembly line tasks, China’s workers are starting to push back.

A strike at an enormous Honda transmission factory here in southeastern China has suddenly and unexpectedly turned into a symbol of this nation’s struggle with income inequality, rising inflation and soaring property prices that have put home ownership beyond the reach of all but the most affluent.

And perhaps most remarkably, Chinese authorities let the strike happen — up to a point.

In the kind of scene that more often plays out at strikes in America than at labor actions in China, print and television reporters from state-controlled media across the country have started covering the walkout here, even waiting outside the nearly deserted front gate on Thursday and Friday in hope of any news. All the Chinese reporters disappeared on Saturday morning, however, as the government, apparently nervous, suddenly imposed without explanation a blanket ban on domestic media coverage of the strike.

A worker at a factory dormitory said on Saturday afternoon that the strike continued, and police were nowhere in sight at the factory or the dormitory. The authorities have been leery of letting the media report on labor disputes, fearing that it could encourage workers elsewhere to rebel. The new permissiveness, however temporary, coincides with growing sentiment among some officials and economists that Chinese workers deserve higher wages for their role in the country’s global export machine.

And without higher incomes, hundreds of millions of Chinese will be unable to play their part in the domestic consumer spending boom on which this nation hopes to base its next round of economic growth.

“This is all because there is a major political debate going on about how to deal with the nation’s growing income gap, and the need to do something about wages,” said Andreas Lauffs, a lawyer at Baker & McKenzie who specializes in Chinese labor issues.

If wages do rise, that could bring higher prices for Western consumers for goods as diverse as toys at Wal-Mart and iPads from Apple.

The Chinese media may also have found it a little easier, politically, to cover this strike because Honda is a Japanese company, and anti-Japanese sentiment still simmers in China as a legacy of World War II. Certainly, the strike is hitting Honda hard, as the resulting shortage of transmissions and other engine parts has forced the company to halt production at all four of its assembly plants in China.

Honda has an annual capacity of 650,000 cars and minivans in China, like Jazz subcompacts for export to Europe and Accord sedans for the Chinese market. Because Honda’s prices in China are similar to what it charges in the United States, the cars tend to be far out of reach financially for most of the workers who make them.

A Honda spokeswoman declined to discuss specific issues in the strike negotiations.

The intense media coverage may evoke historical memories of the 1980 shipyard strike in Gdansk, Poland, that gave rise to the Solidarity movement and paved the way for the fall of Communism in Eastern Europe. But the reality here is much different.

Instead of tens of thousands of grizzled and angry shipyard workers, the Honda strike involves about 1,900 mostly cheerful young people. And the employees interviewed say their goal is more money, not a larger political agenda.

“If they give us 800 renminbi a month, we’ll go back to work right away,” said one young man, describing a pay increase that would add about $117 a month to an average pay that is now around $150 monthly. He said he had read on the Internet of considerably higher wages at other factories in China and expected Honda to match them with an immediate pay increase.

Many workers at other factories in southeastern China already earn $300 a month, but they do so only through considerable overtime. And even that higher income is not enough to embark on the middle-class dream in China of owning a small apartment and subcompact car. Officially, though, the government is discouraging heavy reliance on overtime, and workers here said that Honda was not assigning much.

The strikers said that Honda mainly hired recent graduates of high schools or vocational schools. And so, most are in their late teens or early 20s, representing a new generation of employees, many of whom had not been born when the Chinese authorities suppressed protests by students and workers in Tiananmen Square in 1989 — a watershed event whose 21st anniversary falls next Friday.

The profile of striking workers seems to run more along the lines of slightly bookish would-be engineers — perhaps without the grades or money to attend college — rather than political activists. Besides their low wages, the workers seem focused on issues like the factory’s air-conditioning not being cool enough, and the unfairness of having to rise from their dormitories as early as 5:30 for a 7 a.m. shift.

Workers said that in addition to their pay, they also received free lodging in rooms that slept four to six in bunk beds. They also get free lunches, subsidized breakfasts for the equivalent of 30 cents and dinners for about $1.50.

The striking employees said that some senior workers, known as team leaders, had allied themselves with management. But they insisted that the rank-and-file workers were solidly in favor of walkout — a claim impossible to verify.

Although China is run by the Communist Party and has state-controlled unions, the unions are largely charged with overseeing workers, not bargaining for higher wages or pressing for improved labor conditions. And they are not allowed to strike, although China’s laws do not have explicit prohibitions against doing so.

Workers at the Honda factory dormitory said that the official union at the factory was not representing them but was serving as an intermediary between them and management. Li Jianming, the national spokesman for the All China Federation of Trade Unions, declined to comment.

The workers here have been on strike since May 21, with no resolution in sight. But the strike did not come to broader notice until Thursday and Friday as Japanese media began reporting the shutdown of Honda assembly plants, and as Chinese media and Internet sites were allowed to report extensively on those activities.

The unusually permissive approach of the authorities toward media coverage of the strike follows a decision to tolerate extensive coverage this month of suicides by workers at the Taiwanese-owned Foxconn factory complex in nearby Shenzhen that supplies Apple and Hewlett-Packard.

The official China Daily newspaper ran a lead editorial on Friday that cited the Honda strike as evidence that government inaction on wages might be fueling tensions between workers and employers. The editorial criticized the Ministry of Human Resources and Social Security for not moving faster to draft a promised amendment to current wage regulations because of what the newspaper described as opposition from employers.

Zheng Qiao, the associate director of the department of employment relations at the China Institute of Industrial Relations in Beijing, said the strike was a significant development in China’s labor relations history and that “such a large-scale, organized strike will force China’s labor union system to change, to adapt to the market economy.”

Keith Bradsher reported from Foshan, China, and David Barboza from Shanghai. Bao Beibei contributed research.

Ryan Pyle


  1. Anonymous08:11

    Is it only a coincidence these strikes are at foreign-owned companies and not state-owned/mainland Chinese companies?

    I wonder if/when there is a strike at one of the latter companies if the party would allow them to strike for days for better pay and conditions....your thoughts?

  2. Anonymous,

    This is a great question. My guess is that we would see hell freeze over before there was a major walkout at a state-owned factory making anything. This is no coincidence that this first strike happened at a Japanese firm.

    Someone up in Beijing wants to ramp up domestic consumption and that starts with empowering workers with better wages; foreign companies and JV's first. State-owned companies second.

    Things are surely going to start changing.




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