Honda has been facing a host of strikes at different plants in China recently. The latest is at a lock supplier, located at Southern China’s Pearl River Delta. The workers plan to extend their strike to a third day.
Demands this time are for an increase in annual wages of nothing less than 15%, improved allowances, benefits, the right to organize independent labour unions and a promise from management that anyone joining the industrial action won’t be dismissed. The workers at the plant donned white overalls and pressed up against the factory fences shouting for their demands while being watched by police. “We’re definitely going to strike tomorrow, our wages are too low,” said one of the workers.
Honda Lock have confirmed that shipments to Japan were unaffected for at least a day or two as they have enough existing stock ready for shipment, but went on to add that the negotiations were on going and a prolonged dispute could disrupt the flow of supply to Honda’s car plants. “We’re still gathering information, and we don’t know when the negotiations will end,” Honda Lock’s Hirotoshi Sato said.
Previous strikes at an exhaust pipes maker in Foshan ended late last Wednesday, and as production returns to normal, shipments to Honda’s suspended factories would return to normal on Friday. This seems to be only a temporary agreement though, as key negotiations over pay are still underway it could still turn in either direction.
As we mentioned before, strikes and their accompanying settlements have sparked a whole new revolution in terms of factory workers pay. If automakers are worried about the fact that China’s labour costs might outweigh profitability, they needn’t fret.
One auto analyst from JPMorgan said that wage hikes would have little impact on Honda’s profits as labour cost accounted for just 5 to 6% of its total revenue, even in Japan! “So if we assume wages in China are between one-fifth and one-third those in Japan, the cost of factory floor workers in China comes to around 2% of sales. Assuming factory wages in China were raised a uniform 30%, we estimate the impact on the China operating margin would be (a decline of) just 0.6 percent,” according to report written by analyst Kohei Takahashi.
More company executives agree that higher pay is inevitable for an economy like China which is developing immensely. There have even been some comparisons made between China and Japan in terms of their development.
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so china is not the holy cheap land anymore. now they are demanding wage increase, putting on strikes at plants.
big money question is, why only Honda is having this kind of problem?
i thought the entire car makers moved to china in the last few years?
good one for you HONDA ~
since u r paying so low wages to produce ur car.. why sell it so expensive here in malaysia?
but then i guess must be the dealer taking a huge bite in between!
the culprit is G tax! everyone knows that.
also greedy dealer. take honda accord as an example. In Gulf, it only cost u less than RM 75 K for 2.4 engine honda accord. But in Malaysia. RM 170 K for CKD from Alor Gajah plant
Aiyah, pay the tax on the car you got back the money in terms of cheap healthcare, cheap education etc. etc. Blame the dealers la for being damn greedy cannot reduce profit margin. (But then if reduce profit margin someone here would say it doesn’t make business sense!)
There’s also profit margin after G tax. How else can they get multi-month bonus?
here the dealer also not profitable…. all the money go to their big boss japonese…. they suck our money and making a crap third class vehicle….
Close shop in China, come to Malaysia. Settle problem…
Should learn from Honda. cheap labour and material and sell it expensive. Goverment suck the rest along with dealers. Well done!
i have no problem to increase capacity in melaka factory …. but what the point if factory seludup indon ramai2 dtg kerja? ….
here subsidy remove but no salry increment….. aiyah no fair…..
how many parts plant honda have in China?
1st engine & transmission staff on strike, then exhaust supplier staff on strike, now car lock supply on strike. Honda better do something before electronics / windows / car seat / tyre rim department staff go on strike.
It’s a conspiracy against Honda. :-)
Wow even COMMUNIST countries can have STRIKES these days ?!?!
Malaysia should follow suit lah like dat … :)
i wonder if malaysian supplier factory did this…
sure all have been sprayed with water cannon already….. :lol:
of coz la. in bolehland semua boleh.
It was wrong move for Honda for the start. Now the chinese had seen their comrades gets paid, they too are asking for raise.
China reported a more that anticipated inflation rate of 3.1% today, no wonder more and more factory workers (not just Honda) went on strikes to demand higher wages. They can lower the general cost of living by letting their yuan appreciates in value and bring down the prices of imports, but that move may hurt the competitiveness of its export. On the other hand, increasing wages of workers is a more direct way of putting more spending power into the pockets of the man in the street and keep them happy.
As China wants to shift focus from export to domestic consumption as an engine of growth in the future, raising general wages and disposable income is inevitable.
when is going happen to others japanese brand
I bet Carlos Ghosn is getting the bulk of the millions! He deserve it considering what he had done for Nissan.
they get paid <US200 a month, no wonder
stop using anything in our daily life… since everything is made of china, using it means we are part of global movement that slave china population.
China even supply slave for sex around the world…including boleh land…
Even our sex slaves become uncomparable with China’s, we suck big time
true!!!
they are sex workers.. they are not anybody slaves. it is a fair commercial transaction involving exchange of services for money. and they have the right to refuse certain actions and customers. this is not the definition of a slave. if you don’t grasp the full meaning of te word “slave”, you can always make use of the Internet. to search, which is FOC, instead of parading around your ignorance like it is a badge of honour.
and Malaysian girls do offer sexual services for money too but they only do that in countries where they can earn currencies that are of higher value than Malaysian ringgit. eg Singapore, Australia, UK, US etc.. this is exactly the same reason Chinese girls come to Malaysia to earn ringgit..
if only people stop being ignorant and bother to be more understanding and see the whole picture, the world will be a better place. and yes.. this and the death of Proton too…
So girls, what r u waiting for…let’s go to Singapore, Australiia, UK, US, etc to become sex worker…you can earn a lot of $$$$… Just forget about moral issue…
aiya, move the factory to Malaysia lah
yep..that right..
“One auto analyst from JPMorgan said that wage hikes would have little impact on Honda’s profits as labour cost accounted for just 5 to 6% of its total revenue, even in Japan! “So if we assume wages in China are between one-fifth and one-third those in Japan, the cost of factory floor workers in China comes to around 2% of sales. Assuming factory wages in China were raised a uniform 30%, we estimate the impact on the China operating margin would be (a decline of) just 0.6 percent,” according to report written by analyst Kohei Takahashi.”
See how much Honda is ripping off on profit margins (but I’m not implying they’re the only ones)?