China

Honda strike a turning point for nascent workers’ movement

www.socialistworld.net, 12/06/2010
website of the committee for a workers' international, CWI

A summer of discontent may await the ‘communist’ dictatorship as the giant of labour begins to stir

Vincent Kolo, chinaworker.info

Strikes by workers at Honda-affiliated factories in southern China’s Guangdong province have shaken the ‘sweatshop of the world’. The fighting example of the Honda workers, many in their teens or early twenties, has spawned a spate of copycat strikes across China as migrant workers at foreign-owned companies especially, slaving for notoriously long hours and low wages, demand pay rises, improved conditions and “restructured” trade unions.

The strike wave is only beginning, but if it continues and develops has the potential to transform the economic and political landscape in China. It is already the most significant outbreak of working class struggle since 2002, when workers in heavy industries unsuccessfully fought to defend jobs and pensions as former state-owned industries were sold off and downsized. Today’s struggles centre mainly on manufacturing and the export sector, with its overwhelmingly migrant workforce. The current strikes and especially demands for elections of trade union representatives, pose major problems for the ruling ‘communist’ dictatorship, which fears the growth of an independent workers’ movement more than anything else.

The first Honda strike, in the Guangdong city of Foshan, was “the biggest and most effective strike witnessed against a multinational in China” according to the South China Morning Post. Terry Gou, the billionaire boss of suicide-linked Foxconn, exclaimed, “This is a watershed. You can no longer rely on China’s cheap labour.” Gou, who last week also announced big pay rises at scandal-hit Foxconn in an attempt to break the cycle of youth suicides and a public backlash, predicted wage rises for Chinese production workers would become “an irreversible trend”. Many companies in the same Foshan industrial park where Honda’s plant is sited raised wages as a precautionary measure, probably prodded by the government, to prevent the Honda strike from spreading.

In recent days strikes have flared up in at least five provinces of China, affecting the motor industry, electronic appliances, rubber, sports goods, footwear and industrial sewing machines. Most recently, 8,000 workers in Jiangxi province making the controversial World Cup footballs took strike action. In almost all cases, strikers say they’ve been emboldened by the Honda Foshan victory. “If their strike hadn’t been successful, our workers here probably wouldn’t be as united as we are now,” declared a 22-year-old migrant worker at the nearby Foshan Fengfu Autoparts factory, where 250 workers staged a three-day strike from June 7-9.

Although the strike at Honda’s wholly owned Foshan transmission plant resulted in pay increases of 24 to 32 percent, young workers who spoke to chinaworker.info expressed dissatisfaction and insisted the return to work will be temporary unless their list of 147 demands meets with a favourable response from Honda management. The company has negotiated a 2-month review period to “examine” these demands. Crucial points include the right to hold elections to replace management stooges at the head of the local branch of the official state-controlled trade union.

It is only a week ago that the strike by 1,900 workers at the Foshan plant was ‘resolved’, yet China seems almost a different place since then. The strike which first erupted on 17 May, resumed with greater force on 23 May after management unveiled a miserly increase of just 55 yuan per month. The demand of the workers was an 800 yuan monthly pay rise to bring wages at Foshan into line with workers at Honda’s assembly plants around China. The world’s sixth largest car producer has the capacity to make 650,000 vehicles a year in China, with plans to expand to 830,000 by 2012. The ten-day strike was remarkably solid despite thuggish attempts by management, local government and the puppet union to break the workers’ resolve. Under a dictatorial regime that bans strikes and real trade unions this is a magnificent achievement.

By choking off the supply of parts the Foshan strike shut down Honda’s four car factories in Guangzhou and Wuhan, costing the company a reported US$130 million in lost production. This underlines the devastating power of workers in the era of capitalist globalisation with complex supply chains and just-in-time production methods. Without formal structures and facing fierce legal penalties for participating in any independent organisation, the struggle was built using posters on factory walls, SMS messages and through lightning strikes whereby one department called upon another to join the strike. These workers displayed great tactical audacity: when the management were trying hardest to break the strike and some sections were wilting under the pressure they organised a march inside the factory grounds that drew 500 workers behind it, boosting morale and checking the bosses’ offensive.

On May 31 Honda bosses raised the stakes and attempted to crush the strike. They mobilised the union officials and teachers from vocational schools that supply Honda with huge numbers of trainees – another device commonly used by multinationals to hold down wages in China. Teachers and managers told workers to sign new contracts including a no-strike agreement, threatening trainees they would not receive their final certificates and would face police action for breaking the law. Images beamed around the world showed thugs in yellow baseball caps video filming, bellowing orders and manhandling the young workforce, telling them to get out of the factory if they did not want to work. “You’re action has seriously damaged the factory’s production and operation,” a union leader shouted through a megaphone.

These ‘yellow caps’ were supposedly representatives of the All China Federation of Trade Unions (ACFTU), the sole legal trade union. Rumours are circulating on the internet that the leader of the union’s local branch was paid 600,000 yuan to end the strike, hiring over 100 thugs for 200 yuan per day to rough up the strikers. This was a graphic illustration of the real role of the official unions – as criminals and strike-breakers. The May 31 incident however only enraged the Foshan workers even more. “Now it’s not a matter of pay rises, but upholding our dignity,” one 23-year-old told the South China Morning Post (1 June 2010). A day later, the official union’s spokesman was forced to publish a written apology to the strikers. This only partly met their demands on the matter, however, which included punishment of the “unionists” guilty of physically assaulting strikers.

When management realised they could not easily break the strike by force and intimidation, they retreated, offering significantly improved pay increases of around 400 yuan per month. But this still falls short of the workers’ demand for an 800 yuan increase. The new offer succeeded in dividing the workforce, between a layer who wanted to accept and others who preferred to continue the strike.

Some Foshan workers who spoke to chinaworker.info were critical of the return to work and believe more could have been obtained given the momentum of the strike. Some reluctantly agreed to the deal, which they view as a 2-month “ceasefire”, vowing to stage a new strike if further concessions are not made. A 16-member negotiation team that bypassed the official pro-Honda trade union structures seems to have been under heavy pressure from the company and the government to end the strike before the politically charged anniversary of June 4.

Beijing-based academics who offered their services as “advisers” to the negotiation team may also have urged a swift resolution to avoid the strike being viewed as “political”. How the workers’ negotiating team was selected, given the problems of illegality and risks of victimisation, remains unclear and a subject of continuing discussion. Establishing independent union structures hidden from the company and the state, with its spies and sophisticated surveillance methods, is no easy matter in China. The internet played a crucial role during the strike providing an anonymous forum for workers to discuss the next day’s tactics.

The discussions and even controversies among Honda workers were reflected in an interview given by an unnamed worker to Reuters (June 9, 2010):

“We still have to discuss many conditions... They’ve only agreed to a small number of terms including a very small pay rise that’s far less than what we wanted.... For us, we’re doing all this simply because our wages are too low. But our strike seems to have caused a negative impact on society and trouble for local officials. We don’t want this ... so some of us have decided to go back to work.”

Undoubtedly, desperate to end the strike before the June 4 anniversary, the ‘communist’ authorities were involved in brokering this agreement with the help of some arm-twisting applied to Honda. What assurances they gave to Honda are not yet clear. But this problem was especially acute given the popular backlash in China against another multinational, Foxconn, where a dozen suicides have occurred this year at its two giant factories in Shenzhen. Foxconn has become synonymous with dehumanising exploitation of Chinese labour at its massive plants that resemble self-contained military dictatorships. If the government’s aim at Honda was to pre-empt a potential wave of copycat strike action, however, this strategy has clearly failed.

In recent days two other Honda-affiliated plants in Guangdong have been hit by strike action. The make-up of the workforce – mostly young migrants – as well as the tactics and demands are similar to the original Foshan strike. At the time of writing, the strike at Foshan Fengfu Autoparts has ended with a modest pay award, but a third, at Honda Lock in the city of Zhongshan has entered its third day with around 85 percent of the 1,400 workers joining the strike. The plant supplies door locks and key sets for Honda.

Some media reports give the impression the Chinese regime has taken a benign approach to the strikes – especially against foreign capitalists – as part of a grand stratagem to boost spending power and rebalance the economy from its current reliance on exports to domestic demand. But this view is misleading. Police and company guards have savagely attacked the Zhongshang workers and other strikers in recent days, hardly evidence of official support! One migrant Zhongshang striker told the South China Morning Post that police had distributed leaflets threatening three to five years imprisonment for taking strike action. Likewise the Foshan Fengfu workers complain they settled under massive pressure and threats. The company, a joint venture between Japan’s Honda and a Taiwanese company, told workers their action would be classified as a “riot” and police could crack down at any time.

“We want the same treatment as the Honda Autoparts workers,” explained one worker at Honda Lock. Their demands echo those of the Foshan strike: an increase in basic monthly salary from 930 to 1,600 yuan, double-pay for overtime working, punishment of guards who beat up workers, a “restructured union”, and no victimisation. At Zhongshang and at another strike at Taiwan-owned KOK in Jiangsu province, official media issued false reports that the strike was over. This is partly wishful thinking, partly a deliberate attempt to sow confusion in a situation where strikes must be run on completely informal lines. This tactic was used against Honda Foshan workers, but also failed. Providing proof their strike, now in its third day, was very much alive, Honda Lock workers assembled at the factory fence yesterday to chant: “Are we settling for 200? No way. 300? No. How about 400? No way…”

Other strikes in the southern Pearl River Delta (Guangdong) include action by 300 workers at Taiwanese Merry Electronics in Shenzhen, an audio components factory, who blocked roads on Sunday June 6 to protest against shift changes. Bosses at Merry Electronics claimed they had long ago decided to raise wages ten percent by July 1, “but had never announced this to the staff.” On Monday 7 June, 2,000 workers struck at Yacheng Electronics in Huizhou.

But the strikes are not limited to the Pearl River Delta; they have spread to the Yangtze River Delta near Shanghai, and to inland provinces. In Shaanxi province, 900 workers employed by Brother, a Japanese maker of industrial sewing machines, staged a walkout from 3-10 June. In Shanghai’s Pudong district, a subsidiary of Foxconn, TPO Displays, was yesterday hit by a “near total walkout” over the company’s relocation plans. A “near unanimous” strike by several hundred rubber workers broke out on Friday 4 June at KOK International in Kunshan, Jiangsu province. These workers are striking for pay rises, for overtime pay and against the company’s non-payment of social security and injury insurance. Around 50 workers were injured in clashes with police last weekend: “The police beat us indiscriminately... They kicked and stomped on everybody, no matter whether they were male or female,” said one woman worker. At least seven strikers have been detained by police. Current strike battles are not only occurring at multinational companies. A strike was reported at the state-owned Qijiang Gear Transmission factory in Chongqing at the same time as the Foshan Honda struggle.

The double-digit increases being wrung from the bosses through some of the current disputes seem dramatic, but as even capitalist commentators point out these are only ‘catch up’ claims – manufacturing wages have been frozen since late 2008 when the global capitalist crisis struck China. In many cases, real wage levels have not improved since the mid-1990s, while price inflation especially for necessities like food is now eating into wage packets and fuelling worker discontent. Chinese workers still have a long way to go even to catch up on workers in other so-called emerging economies. Wage rates in China’s manufacturing industry are just five percent of those in South Korea and 17 percent of those for Brazilian workers.

The share of GDP that goes to workers’ wages has been shrinking unremittingly for 22 years, from 57 per cent in 1983 to just 37 percent in 2005. These statistics show graphically which class has paid for the capitalist “reforms” put in place over that period. At the same time, labour productivity – the amount each worker in China can produce – has risen by more than 9 percent a year over the past five years, according to estimates by the U.S. Conference Board (Wall Street Journal, June 7, 2010). Yet the official trade unions recently reported that almost one in four Chinese workers has not had any pay increase for five years. Consequently, labour costs are only a fraction of the total overheads of multinational companies operating in China.

In Honda’s case, for example, a uniform 30 percent increase in factory wages would only reduce the company’s operating margins by 0.6 percent. Even based on the wage rises granted to Honda Foshan workers, raising monthly pay to around 1,650, it would take a worker 7.5 years’ of labour, forgoing meals and other expenses, to buy the cheapest China-made Honda Civic. As Marx explained, the source of the capitalists’ profit is the labour power of the working class, but then workers cannot afford to buy back what they produce, forcing the market system into inevitable crises and upheavals.

The Chinese economy seems to be booming again, with GDP expanding 11.9% from a year earlier in the first quarter. This is undoubtedly spurring the most exploited sections of Chinese workers and a new comparatively fearless generation of youth to demand their share of the economic recovery. Labour shortages exist in many coastal provinces whose economies are dominated by multinationals. Government data recently showed a 35 percent jump in vacancies posted by employers in the first quarter of 2010, but only an 8 percent rise in the number of applicants for those vacancies.

A major factor is the property-driven boom in inland provinces, also fuelled by big infrastructure projects financed by local governments, which has generated new jobs in manufacturing, construction and services closer to China’s traditional sources of migrant labour. Many especially older migrants with children would now rather take jobs in or near their home provinces, turning down higher paid work in the coastal sweatshops. Guangdong province reportedly suffers a deficit of 2 million migrant labourers this year, and other coastal provinces face similar pressures.

But there are other social and economic factors behind the current more combative mood on the factory floor and especially the role of a younger generation of migrant workers. These workers no longer view the city as a temporary home with the perspective of returning to the countryside after accumulating money to build a home or start a family. They are increasingly urbanised in their outlook and angered by the systemic discrimination and ill-treatment that is the lot of migrant workers. The many ingredients in the Chinese economy and society today (not least the highly unstable “bubble” character of the current boom) make an explosive mix. In a negative sense this is shown by the despair of Foxconn, and in a positive sense by the flame of struggle that seems to have passed from the hands of Honda’s young strikers to workers in other factories of China.

In order to avert the spread of the current strikes, the Chinese regime may order a new round of increases in minimum wages levels (set at city and provincial level, with big variations). This may be accompanied by massive propaganda to the effect that the government believes workers deserve a “fair share” of economic progress, but also with dire threats that the regime will not tolerate “threats to stability”. On many occasions before we have seen a similar “carrot-and-stick” combination employed by the ruling party to diffuse popular movements. But even this course of action carries significant risks for the Chinese regime and for global capitalism, which depends so heavily on China, especially if concessions are seen as a result of workers’ struggle.

chinaworker.info calls for independent trade unions and the right to strike alongside other fundamental democratic rights in China. We call for immediate pay increases for all workers to make up for long years of stagnation and rising prices. We demand a national minimum wage of 3000 yuan. We call for an end to compulsory overtime working and for workers’ democratic control over workplace health and safety. We support workers’ struggles to achieve even modest improvements, while pointing out that mass struggle for a socialist alternative is needed to guarantee decent jobs, wages and welfare for all. chinaworker.info and Socialist Action (cwi in Hong Kong) have organised and participated in several protests in solidarity with workers at Honda in China and also for workers at Foxconn as the following articles report (all on chinaworker.info):

8 June: Protest outside Apple shareholders’ meeting in Hong Kong (Chinese)

7 June: Report of strike at Merry Electronics, Shenzhen (Chinese)

3 June: Solidarity with Honda Foshan workers – Hong Kong protest (English)

2 June: Solidarity with Honda Foshan workers – Hong Kong protest (Chinese)

1 June: Honda Foshan strike – struggle continues (English)