Toyota Motor Corp. was hit by at least the third strike among its suppliers in China as widening labor unrest continued to disrupt Japanese manufacturers’ output in the world’s biggest auto market.
Workers at a venture of Denso Corp., Japan’s biggest auto- parts maker, walked out yesterday, shutting the plant in Guangzhou, Guangdong province, Toshihiro Nishiwaki, a spokesman for the Aichi, Japan-based company, said by phone today. The parts maker is in talks with the employees, who are demanding higher pay and improved benefits, he said.
Labor unrest in China is spreading to Toyota after employees at suppliers to Honda Motor Co. agreed to return to work with promises of higher pay. Toyota closed a factory in Tianjin on June 18 because of a strike at supplier Toyoda Gosei Co. in the northern Chinese city, said Mieko Iwasaki, a spokeswoman for the carmaker.
“So far, at this stage, the strikes are occurring at Japanese suppliers,” which pay about half the wage level of European and American companies, said Lin Huaibin, an analyst in Shanghai at consulting company IHS Global Insight. “We could see unrest spread to Korean and Taiwanese makers.”
Denso is about 23 percent owned by Toyota, the world’s largest carmaker, according to data compiled by Bloomberg.
Toyota said it’s unclear whether the strike will impact production at the carmaker’s ventures in Guangzhou and Tianjin, said Niu Yu, a Beijing-based spokesman for the carmaker. Shen Meihua, Denso’s Beijing-based spokeswoman, wasn’t immediately available for comment.
Six Strikes
Toyota fell 0.6 percent to 3,275 yen as of 1:52 p.m. in Tokyo trading, while Denso dropped 1.4 percent.
Denso Guangzhou Nansha Co., the joint venture in Guangzhou, manufactures and supplies fuel injection systems for customers including Toyota. The venture employs about 1,100 workers, according to a Denso company report.
Suppliers to Toyota and Honda agreed to raise wages as at least six previous strikes broke out at their Chinese factories in the past month, disrupting their production in the world’s largest auto market.
Toyota affiliate Toyoda Gosei Co. ended a strike on June 19. Workers at another Toyota supplier, Tianjin Star Light Rubber and Plastic Co., also walked out briefly on June 15 before the dispute was settled when the company offered a pay increase.
Pay Increases
Honda agreed last month to raise pay 24 percent for workers at a parts plant in Foshan after a strike shut down all four of its China car factories. Another Honda parts supplier in Foshan, Guangdong, was shut June 7 to June 10 by a walkout.
More than 20 Chinese provinces and cities, including the manufacturing hub Shenzhen, raised minimum wages this year to help companies recruit workers and to boost domestic consumption, the city government said this month.
Higher investment and improved wages in western China are deterring workers from migrating, pushing up pay in more industrialized regions like Guangdong in the south, said David Abrahamson, project manager at the China Center for Labor and Environment.
Workers say the pay increases are necessary to help keep pace with the rising cost of living in the world’s most populous nation. Inflation accelerated to an annual pace of 3.1 percent in May, the biggest increase in 19 months. Property prices in May jumped 12.4 percent across 70 cities from a year earlier, the government said June 10.
(bloomberg.com)
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