Toyota plant in China remains shut due to strike
Toyota Motor Corp. said production at one of its main factories in China remained suspended today due to a strike, while Honda Motor Co. resumed operations at a car assembly plant there following the end of a labor dispute.world Updated: Jun 24, 2010 11:40 IST
Toyota Motor Corp. said production at one of its main factories in China remained suspended on Thursday due to a strike, while Honda Motor Co. resumed operations at a car assembly plant there following the end of a labor dispute.
Toyota, the world's largest automaker, said it was unclear when it can restart car production at its plant in southern Guangzhou. Production at the Guangzhou plant has been halted since Tuesday due to a strike at a supplier run by Japanese parts-maker Denso Corp. Chinese migrant workers, the backbone of the country's industrial sector, are becoming increasingly vocal in demands for higher wages. The increasing agitation among workers poses a problem for Japanese companies that shifted production to China in the hopes of taking advantage of lower labor costs and cashing in on its growing consumer market.
The strike at Denso (Guangzhou Nansha) Co. Ltd. began on Monday after Chinese workers demanding better wages refused to work. But Denso said some employees returned to work Thursday, enabling it to resume production partially.
"Production is limited at this point, but we hope to return to full production as soon as possible," said Denso spokesman Goro Kanematsu from the company's headquarters in Aichi, central Japan. Denso was holding wage talks with Chinese workers, and aims to strike a deal soon, Kanematsu said. He declined to give further details.
Denso's factory, which employs 1,100 workers, makes fuel injectors for engines.
Toyota's Guangzhou plant, which represents about half of the Japanese company's total capacity in China, makes the Camry and the subcompact Yaris.
Honda, meanwhile, said production at one of two auto assembly plants at its joint venture Guangqi Honda Automobile Co. resumed Thursday following a one-day suspension caused by labor unrest. Guangqi Honda had already shut down production three times since late May due to strikes. Honda's other plants in China also halted production from late May to early June due to strikes. A string of walkouts by Chinese workers are slowing output by Japanese auto giants and adding to costs at a time when they have been ramping up production to meet strong demand there. While strikes have stifled output at Toyota and Honda, auto analyst Ryoichi Saito said the impact of the labor unrest in China on their profits is so far limited.
"I don't see output suspension is hurting their annual profits yet. But if strikes prolong for one or two months, then we should be worried about their profitability," said Saito from Mizuho Investors Securities Co. Ltd.