The demands of striking autoworkers in China are “reasonable” and stem from flawed industry pay scales, according to a senior executive at one affected carmaker.
“Entry-level workers aren’t paid enough,” Zhang Fangyou, chairman of Guangzhou Automobile (GAC), told the Financial Times. “It’s a structural problem.”
Government-controlled GAC has invested in joint-venture car factories with Toyota and Honda in Guangzhou, capital of southern Guangdong province. At various periods over the past month, the plants have been forced to suspend operations after strikes at downstream suppliers halted the flow of needed components.
Honda’s two assembly plants in Guangzhou halted production on Wednesday because of disrupted supplies. A spokesperson said normal operation would resume on Thursday morning.
Toyota on Tuesday confirmed that a strike at parts supplier Denso (Guangzhou Nansha) had halted production at the Japanese carmaker’s nearby assembly plant. The industrial action came just days after Toyota, which has a 23 per cent stake in Denso, resolved two supplier strikes in the northern port city of Tianjin.
It was the first time that Toyota’s operations in southern China have been affected.
Until Tuesday, worker unrest in Guangdong had been focused on Honda, which over the past month has had to deal with four supplier strikes in the province.
“Worker demands [at each supplier] have basically been the same,” said Mr Zhang, who did not comment on the latest strike at Denso. “They are asking for higher wages and better benefits.”
Denso confirmed that “a majority” of the plant’s 900 production staff had joined the industrial action.
Mr Zhang noted that while more skilled or experienced autoworkers were relatively well compensated, entry-level employees are often paid little more than the local minimum wage. Before the recent strike at Honda Lock, base pay for junior factory workers was just Rmb930 ($135).
Such compensation levels are frustrating Guangdong’s development strategy, which assumes that higher value industries will pay more generous wages and boost local consumption. While a local media ban on reporting of the recent strikes remains in force, senior Chinese government officials have attempted to mollify worker anger with sympathetic comments.
According to Mr Zhang, foreign managers often have a poorer understanding of worker grievances and dispute resolution channels than their Chinese counterparts. In at least three instances, GAC has dispatched senior executives to help its Japanese partners resolve their labour disputes.
“[Honda and Toyota] wanted to manage these suppliers themselves,” Mr Zhang said. “But now they need our help and the government’s help to deal with the workers.”
“The workers are more willing to listen to our suggestions,” he added. “When labour has a conflict with management, workers appreciate being able to talk to a third party.”
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