A Political Economic Analysis of the Strike in Honda and the auto parts industry in China

The strike that broke out in Honda Auto Parts Manufacturing Co Ltd in Foshan city of Guangdong province on 17 May dragged on for nearly one and a half month ending in early July. The strike involved nearly the whole work force on the shopfloor who are mainly migrant workers. By laying down their tools for 4 days, the workers in CHAM brought the production of 4 Honda assembly subsidiaries to a halt causing the company to lose 220 million Yuan by estimates. And for the first time in the industrial actions taken by the migrant workers, the strike articulated clearly the demands for reforming the only legal trade union, the All China Federation of Trade Unions. A paradigm shift in the Chinese labour struggle is expected and it is likely to be one that is led by the domestic migrant workers for economic justice and associational rights.

The IHLO examines the causes as well as the implications of the strike in CHAM and finds a number of issues that should draw the interests of the international trade union and labour movement in their analyses and strategizing for organizing the auto industry and supporting the Chinese labour struggles:

1. The strike took place in the context of hightened localization of auto production and sourcing in mainland China. The auto multinational companies are shifting their investment strategies from trade seeking to market- and low-cost-labour- seeking ones in the integration of China into their global and regional production network.

2. The Chinese government has changed the auto policy from protectionism to conglomerisation of the domestic auto industry. The increasing foreign direct investment in the auto and auto parts industry is welcomed by the central and the local governments in Guangdong resulting in the political and economic domination of the auto capital vis-à-vis labor.

3. As a result, the auto clusters in Guangdong province are simultaneously wage clusters where sub- standard practices are normalized. These norms as found in the case of CHAM and they became causes to the strike: stark contrasts in the wage and welfare between the assembly and auto parts workers; unequal pay for equal work between the regular workers and the interns; tremendous wage gap between the local workers and the Japanese expatriates; absence of a wage mechanism for fair sharing of profits.

4. The de-skilled workers have turned their weak position into critical one in the lean production system making the strike the most powerful one so far that was led by the migrant workers.

5. The strike has shifted the paradigm of wage regulation from legislation to industrial actions. Strikes and demands for higher wages were cried for in more than a hundred enterprises in Guangdong after the CHAM strike.

6. The labour challenge to the administrative power of the ACFTU granted by the state rather than workers on the shopfloor comes to the open. The frustrations and the open articulations are likely to produce replication effects in the future migrant labour struggles. The political conscientisation of the workers in the recent strikes makes the ACFTU’s attempts for professionalization of the trade union officials looks like another top-down measure to mask the more fundamental issue. For the next stage, the strike should lead the workers in CHAM to reform the plant union through open and fair elections of, by and for the workers.

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