News reports on labour disputes and trade unions

China Labour Bulletin is quoted in the following articles and broadcasts. Copyright remains with the original publisher.

Financial Times: Foxconn raises pay by 30% in China
LA Times: China's factory workers finding, and flexing, their muscle
Reuters: New generation shakes China labour landscape
Financial Times: Honda 24% pay offer fails to appease workers
SCMP: Workers, unionists clash at Honda plant in Foshan
BON: Expert View: Suicides and Strikes
Radio Australia: Era of cheap Chinese labour on the wane

Foxconn raises pay by 30% in China

By Kathrin Hille in Beijing and Tom Mitchell in Hong Kong
June 3 2010

Foxconn, the world's largest electronics contract manufacturer, has upped the scope of a planned pay rise for its workers in China by one-third, underscoring the growing pressures for better working conditions in the country's export manufacturing base.

Wages for production workers in all Chinese factories of Foxconn companies were raised by 30 per cent as of June 1, according to Hon Hai Precision, the group's Taiwan-based parent.

Last week, Foxconn, which has been thrown into the international spotlight after a series of worker suicides at its manufacturing plant in Shenzhen, said it was planning to raise wages by an average of 20 per cent. Some labour activists had argued that Foxconn's initial increase was not as generous as it seemed.

China Labour Bulletin noted that government authorities in Shenzhen, a manufacturing centre where Foxconn operates a large factory complex, would announce a 10-20 per cent hike in the minimum wage on July 1 . The pay rise comes amid a surge of debate about pay and other conditions for migrant workers labouring in the Pearl river delta, a manufacturing belt in southern Guangdong province dubbed the "workshop of the world".

The debate was triggered by the suicides in Shenzhen this year and by a rare strike at a Honda factory in Foshan.

Hon Hai said yesterday that some group factories which had raised wages earlier this year would adjust the rise to bring workers' pay to a level of 30 per cent higher than last year's. Foxconn employs about 800,000 workers in more than 20 locations in China.

Analysts said the unexpectedly large rise would put new pressures on Foxconn's customers - companies such as Hewlett-Packard, Apple, Dell, Motorola and Sony which have their handsets, PCs and game consoles assembled by the Taiwanese-owned company.

Hon Hai said it might pass on some of the financial burden from the pay rise to customers but it would take months to determine the net cost of the move.

"There will be extra cost but also better efficiency as the rise is expected to lower the staff turnover rate," Hon Hai said.

Steve Jobs, Apple chief executive, said yesterday that he was upset about the suicides at Foxconn, and that Apple was sending outsiders to learn about conditions at the complex.

"We're all over this," he said, adding that the facility "is not a sweatshop" but a complex with pools, restaurants and movie theatres.

Meanwhile, Honda said its transmission plant in Foshan had restarted production after "a large portion" of the factory's 1,800 workers accepted a 24 per cent wage increase to Rmb1,900 ($280) per month.


China's factory workers finding, and flexing, their muscle

As the number of working-age laborers dwindles, dissatisfaction with low pay and brutal hours has grown. Big companies are beginning to offer pay increases to stem the anger.

But a strike at Honda Motor Co. and a rash of worker suicides at one of the world's largest electronic-components plants in recent weeks have highlighted the challenges China will face as it continues to rely on cheap labor.

Experts say younger factory workers, having grown up in a time of relative prosperity, will find it increasingly difficult to accept low pay and grueling work hours the way previous generations have.

China's rapidly aging population also is expected to boost labor's leverage as the number of working-age Chinese dwindles to about half its current portion of the population by 2030.

Labor shortages already are being reported in many export-driven coastal provinces because of rapid development in China's interior. Several provinces and major cities such as Shanghai have had little choice but to raise minimum wages.

"Most of the workers born after 1980 have a better awareness of their rights," said Liu Kaiming, an expert on migrant labor and executive director of the Institute of Contemporary Observation. "They will choose where to work and ask for better salary."

That's exactly what happened May 17, when nearly 2,000 workers at a Honda parts factory in the southern city of Foshan walked off the job to demand higher wages. About 600 of the employees were interns receiving credits for work experience as part of their school curriculum.

Assembly lines were resuming production Tuesday as workers contemplated management's offer of a 24% pay increase that would bring monthly salaries to about $281, or 1,910 yuan, said David Iida, a Honda spokesman in Torrance.

"There have been some negotiations going on, and it appears that they are going smoothly. They are resuming production and it looks like the situation is resolved," Iida said.

His account conflicted with an online report in the China Daily newspaper that said production remained idled Tuesday.

A day earlier, dozens of uniformed Honda employees clashed with members of the All-China Federation of Trade Unions, an umbrella organization whose state-sanctioned leaders are largely ineffectual in representing workers' interests.

The new wages will be more than double China's minimum for the region, Iida said.

Last week, another major multinational firm also offered pay increases to try to quell a labor crisis.

Foxconn Technology Group had promised a 20% raise to its Chinese employees after the 13th worker this year attempted suicide. Ten have died.

It's unclear whether low wages played a part in sowing discontent among the company's labor force. But worker advocacy groups have alleged that the maker of Apple iPods and Dell computer components uses a military-like atmosphere to keep employees in line.

In a sign that workers' voices are being heard, the government mouthpiece People's Daily ran an editorial Monday saying unions needed to be more sensitive to the psychological needs of younger migrant workers.

On Saturday, Wang Yang, Communist Party chief for Guangdong province, where Foxconn is located, urged management to improve care for its employees and called for "better working conditions."

Geoffrey Crothall of the China Labour Bulletin in Hong Kong said higher demand for labor had helped boost wages, but they were nowhere near in line with the country's rising wealth, corporate profits and cost of living.

"Wages at the lowest end of the scale are simply not on pace with economic growth," he said. "What seems like substantial increases are really insignificant."

Although it's impossible to know how many labor strikes occur in China, experts say the Honda strike may galvanize workers elsewhere, much the way taxi-driver strikes spread across the country in 2008. But not all companies are wealthy enough to give in to wage demands the way Honda and Foxconn are poised to do.

"There could be significant tension," said Arthur Kroeber, managing director of Dragonomics, a Beijing research firm. "Workers have more bargaining power, and companies are reluctant to grant higher wages."

Hu Jiushang, a 22-year-old migrant worker in the factory town of Shenzhen, said he was paying attention to local news reports of the Honda stoppage.

He said he could see a similar action taking place at his cellphone and computer-panel factory, where workers have to apply in writing for their legally mandated weekly day off. Many don't bother and work weeks on end without a break

"Some co-workers and I wrote a letter asking for the situation to improve and left it in the suggestions box, but nothing's changed," said Hu, who had taken one day off in the last month.

david.pierson@latimes.com

Staff writer Jerry Hirsch in Los Angeles and Tommy Yang in The Times' Beijing bureau contributed to this report.


New generation shakes China labour landscape

Jun 1, 2010

BEIJING/HONG KONG (Reuters) – In a reversal of the classic picket-line clash, Chinese workers at a Honda auto parts plant held out for higher wages this week while men in yellow caps from the government-backed union tried to end their strike.

The strange dynamics of the strike that forced Honda to suspend auto production in China for more than a week reveal a growing impatience by Chinese workers with the state-backed union, and shifting demographics that may eventually give them more leverage than their parents ever had.

“Foreign investors have been lulled into a false sense of security that China has a docile work force,” said economist Arthur Kroeber of Dragonomics.

“There’s nothing intrinsically docile about the Chinese labour force. There was a period when everything was kind of fine; now we are entering a period of more constraint.”

No reliable figures exist on the number of job walk-offs each year by Chinese workers, and many disputes are likely short and go unreported. But anecdotal evidence suggests the Honda clash reflects a larger trend, in which the balance of power may be shifting toward workers.

The number of Chinese between the ages of 15 and 24 has hovered around 200 million to 225 million for the last 20 years. That number is likely to fall by one-third during the next 12 years, Kroeber said, giving more bargaining power to the young people pouring into the workforce.

“Ultimately, the teeth that lies behind (labour conditions) is the workers’ notion that ‘if we strike, we’ll be thrown out of a job and there’s another 10,000 people to replace us.’ Now the teeth are removed because there aren’t another 10,000.”

For now though, the decks are still stacked against workers who try to independently press for better wages.

IMPACT OF STIMULUS

Chinese workers collectively tightened their belts in 2008, when the initial shock of the global financial crisis forced some factories out of business and led many others to cut wages.

The economy has since roared back to life, and stimulus measures in smaller cities have kept many workers closer to home, away from the export-oriented factories of the coast.

“It suggests that the stimulus packages have been incredibly successful at creating jobs,” said Glenn Maguire, Asia chief economist for Societe Generale.

Multinationals and Chinese exporters have responded by moving production and sourcing to inland regions, where wages are lower, or by hiring students and migrants from remote regions through schools or government agencies.

About 600 of Honda’s 1,900 workers at the auto parts plant in Foshan, in southern Guangdong province, dubbed the workshop to the world, were “student interns” contracted out by their schools for between six to 18 months of full-time work on the factory floor.

As its regular workers went on strike, the interns were asked to sign a pledge not “to lead, organise or participate in” any strike.

Chinese workers are not allowed to form unions independent of the All-China Federation of Trade Unions, an umbrella organisation run by the Communist Party to which companies pay a percentage of wages. Historically, the ACFTU tries to prevent strikes.

On Monday, workers who refused to accept Honda’s wage offer clashed with union representatives, who tried to force them off the factory grounds.

“The trade union doesn’t represent us,” said a young woman who declined to be named. “They asked the company to negotiate with us, but they didn’t help us. They just turned our requests down.”

While China’s first generation of migrant workers may have been poorly-educated peasants used to a life of back-breaking labour on the farm, the new generation often has no land and no farming experience to fall back on.

“When their parents’ generation migrated, they knew nothing about factories,” said Lee Chang-hee, senior specialist on industrial relations for the International Labour Organisation in Beijing. “For the second generation, it’s different. Some were born in the cities, although they are still registered as rural. Some strive to become urban citizens.”

“They have no other life outside the factory, so they have to make the factory work for them.”

ORGANISING VIA SOCIAL NETWORKS

Workers organised the Honda strike using social networking tools like Internet-based chatrooms and China’s popular messaging service, QQ.

“The chatrooms have now been deleted, but they were clearly saying ‘the union is useless, let’s do this by ourselves’,” said Geoffrey Crothall, editor of the China Labour Bulletin, which documents labour conditions in mainland China.

That could increase Chinese leaders’ nervousness over activism by young workers, some of whom were born after the 1989 crackdown on pro-democracy protests on Tiananmen Square.

Workers involved in those protests had also tried to form independent unions.

Strong-arm tactics by bosses, official complicity and difficulties in uniting the transient migrants who staff Chinese factories still works against the labour movement in China.

“It’s difficult to do … in each factory you need leaders with a certain quality to lead the workers. Someone with legal knowledge,” said a labour activist and factory worker in southern China who asked not to be named.

A more pressing worry is the policy dilemmas for the Chinese government, which has an official target of raising wages and household income, without deterring the investment in production capacity underpinned by three decades of cheap labour.

A rash of recent suicides at a huge factory belonging to Foxconn, a contract manufacturer for groups such as Apple, Dell and HP, put a harsh spotlight on China’s labour conditions.

The potential for other workers to take inspiration from fellow workers at Honda was revealed when workers at a Hyundai Motor auto parts plant near Beijing walked off the job this weekend. They were quickly promised higher wages.

“Other countries’ experiences show that once it happens, it spreads very easily under the current situation of labour shortage,” said Lee, a native of South Korea.


Honda 24% pay offer fails to appease workers

By Tom Mitchell in Hong Kong and Jonathan Soble in Tokyo
Published: June 1 2010

Production at a Honda components factory in China remained stalled on Tuesday, in spite of the company’s offer of a 24 per cent wage increase to striking workers.

The Japanese carmaker said most of the 1,800-strong workforce at its transmission plant in Foshan, a factory town in southern Guangdong province, had accepted the wage increase.

But some workers insisted their industrial action was continuing, while others said they would return to the plant but refuse to work once there.

One worker said: “The strike is still on.There will be more negotiations today.”

The strike, which began last week, has also closed Honda’s car plants in nearby Guangzhou, the provincial capital, and Wuhan in central China. Honda’s offer would raise average monthly salaries at the factory to Rmb1,900 ($280). Workers had been pressing for up to Rmb2,500.

Strikes at large multinational companies are rare in China, where independent union activity is usually suppressed by the government.

Tensions have been mounting in recent days, with scuffles breaking out on Monday between striking workers and representatives of the government-sanctioned All China Federation of Trade Unions.

Honda workers, who have complained that the ACFTU does not represent them and is aligned with management, have been pressing for the right to elect their own union leaders.

Han Dongfang, founder of the Hong Kong-based China Labour Bulletin, warned that the Foshan strike had entered a dangerous phase.

He said: “Now is not the time to fan the flames. The more they push, the more likely the government and the police will get involved”.

Mr Han,once imprisoned by the Chinese government for his efforts to establish an independent union during the 1989 Tiananmen Square protests, said the workers’ best option was to accept Honda’s offer and lie low and continue their fight another day.

Reflecting the government’s nervousness about the escalating situation, local media outlets have been ordered to rein in coverage.

One Chinese journalist who has spent much of the past week camped outside the factory’s gates said: “The government has banned us from doing any more reporting on this strike“.

Although it is now muted, earlier local media reports about the strike have inspired sympathetic discussions in internet chat rooms and morale-boosting music videos showing protest footage of Honda’s uniformed employees.

Workers, unionists clash at Honda plant in Foshan

Minnie Chan in Foshan and Verna Yu
Jun 01, 2010
Tempers at a key Honda component factory in Guangdong reached boiling point yesterday as workers and government-backed trade union staff clashed amid failure to persuade employees to return to work.

Analysts said the incident showed that the lack of independent trade unions, which can truly represent workers' interests, could lead to escalating social conflict.

Dozens of riot and uniformed police were standing by after the scuffles broke out.

Some workers on the early shift were told yesterday to join a meeting to negotiate pay issues with Honda's representatives in the presence of local Shishan town Federation of Trade Union staff and government officials, according to the website of mainland-based Caixin Media.

The negotiations broke down when the workers refused to sign a document guaranteeing they would end the strike, said the workers, who considered the company's offer too low. One of the section heads had threatened to sack his workers if they did not agree to sign, they said.

Staff at the plant are demanding that their monthly pay be raised to between 1,700 yuan (HK$1,938) and 2,500 yuan a month, according to workers.

Honda said last night some employees had returned to work at the plant in Foshan after the company offered to lift the starting salary from 1,544 yuan to 1,910 yuan, a 24 per cent rise, Xinhua reported.

A scuffle broke out between workers and trade union staff after some union staff tried to video the workers. Some workers tried to snatch the video camera, workers said.

Another scuffle broke out in the afternoon in front of reporters and a curious crowd as about 70 workers were surrounded by 200 trade union representatives.

Some workers claimed they were surrounded and beaten by the union staff. One female worker was pushed to the ground, a male worker was pulled by the hair, and the face of another scratched, workers said.

Some workers cast doubt on the identities of the local trade union staff as they had never seen them before. "We pay union fees every month. You should represent us, so how come you're beating us?" one worker shouted.

Another worker shouted: "How come Chinese people are beating Chinese people? You're not listening to the Chinese, but you're listening to the Japanese?"

A trade union leader replied through his loud hailer: "Your action has seriously damaged the factory's production and operation." He said workers could resign if they preferred not to work.

The Shishan town trade union later confirmed it had sent representatives to the plant but denied beating the workers.

"That's absolutely impossible," said one official, who declined to give his name.

Independent trade unions are banned on the mainland, and collective bargaining is rare. All trade unions in the country are part of the Communist Party-controlled All-China Federation of Trade Unions, which is the only official union and historically has been more closely aligned with management than workers.

One 23-year-old employee said workers felt insulted by the actions of the trade union representatives. "Now it's not a matter of pay rises, but upholding our dignity," he said.

In the afternoon, police cordoned off the roads to the factory and turned back busloads of workers who were on their way to start their afternoon shift.

A staff member at Honda Auto Parts refused to comment on the incident when contacted by the South China Morning Post.

Honda Auto Parts is based in Foshan's industrial Nanhai district and employs about 1,900 staff making components for transmissions and engines used in Accord sedans, Civic hatchbacks and other models the Japanese firm manufactures in its joint ventures with Guangzhou Automobile Group and Dongfeng Motor (SEHK: 0489), based in Wuhan , Hubei .

The potentially embarrassing incident - one of the largest industrial actions at a joint venture company in recent years - broke as Premier Wen Jiabao met Japanese Prime Minister Yukio Hatoyama in Tokyo. The two sides endeavoured to strike a cordial note following a series of tense naval incidents.

Geoffrey Crothall of China Labour Bulletin, a Hong Kong-based workers' rights group, said the incident showed the official trade union had failed to represent the rights of mainland workers.

"I think the problem is simply that workers don't have any outlet for grievances. The trade union will not listen to the workers. They are out of touch, and they cannot represent their interests, so the workers are taking action themselves," he said.

"They are far more concerned with economic and social stability and the interests of the company than the interests of the workers they are supposed to be representing."

Dr Chan Kin-man, a sociologist at Chinese University, said the central government's reluctance to allow civil society - such as independent unions - to act as a buffer in social conflicts could lead to dangerous results.

Expert View: Suicides and Strikes

Jun 03, 2010

As spring has turned to summer here in China, problems between workers and management at multinational corporations in the south of the country have started to heat up.

First a string of suicides at their factories brought Foxconn, the country's largest contract electronics manufacturer, to its knees.

Then a strike by workers at a Honda transmission assembly plant brought work at all four of the company's factories in China to a halt.

To try to get a sense of what these incidents mean and where things may be heading, we have on the line Geoffrey Crothall from the Hong Kong-based NGO China Labour Bulletin, which seeks to defend and promote the rights of workers in China.  Watch video

Era of cheap Chinese labour on the wane

June 2, 2010

There are increasing signs the era of cheap labour in China might be coming to an end. Honda Motor workers have secured a 24 per cent pay rise after a week of sometimes violent strike action which closed all four of Honda's plants in China. And production workers at the Foxconn factory where there have been ten suicides this year are to receive a 30 per cent pay boost. The second generation of Chinese factory workers could be better acquainted with their rights than their parents may have been.

Presenter: Karon Snowdon
Speakers: Lee Chang-Hee, of the International Labour Organisation in Beijing, Geoffrey Crothall, China Labour Bulletin.   Listen

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