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June 3, 2010

Honda in China going back to work

CARS - Honda's operations in China are going back to work today after 3 weeks of striking workers demanding a "living wage". They eventually got a 24% wage increase, but its a sign of growing unrest in China's booming automotive market.

Chinese autoworkers are in high demand and there's growing competition between automakers for who can get the most skilled, experienced employees and keep them happy. Its resulted in driving wages higher because these workers know they're in demand and can easily go to another car manufacturer and get paid more if they want to.

Its a growing sign of labour disputes in China's red hot economy where everything is booming and inflation is starting to put stress on workers who rarely see wage increases.

For example Foxconn, which manufactures parts for Apple's iPhone, announced a 30% raise for its workers, following a spate of suicides at its Shenzhen factory when workers realized they were basically slaves and powerless.

The big trick however is that in China these events rarely make the news inside the country. The Chinese government wants to prevent workers from realizing they can strike for better wages so they keep such information from being released in the state-controlled media.

A mass hike in salaries would be a good thing for China's growth, creating a larger domestic market and less dependent on exports.

In related news...

General Motors and Ford report double-digit growth in China sales in May and new monthly records. GM sales are up 48.7% compared to May 2009, selling 196,400 vehichles in May 2010. GM says total sales for January to May 2010 rose 53.9% over a year earlier to 1,032,665 vehicles. Ford is reporting sales up 17.8% compared to May 2009, selling 23,742 vehichles in May 2010.

China overtook the United States in 2009 as the biggest auto market by vehicles sold.

1 comment:

  1. It's time that Entrepreneurs realize that they should invest in people and happy employees are an asset.
    This is the modern world and China should not be using slave labor.

    ReplyDelete

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