Thursday, June 10, 2010

Foxconn and Honda Incidents Inspire Mainland Chinese Labor Movement

Foxconn and Honda Incidents Inspire Mainland Chinese Labor Movement
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
June 10, 2010

If a human being plunges to his death from the top of a building, it may evoke a few expressions of regret. But the sound of a dozen or so bodies hitting the pavement, one after another, may send tremors through the World's Factory. The suicide leaps from the roof of the Foxconn headquarters building, and the labor strikes at the Honda Foshan plant, recently led to substantial pay raises. They have stimulated demands for wage increases in both mainland Chinese and foreign owned enterprises. They have also increased awareness of the human rights issue among mainland Chinese laborers. They will eventually have a profound impact on mainland Chinese society.
Thousands of factory workers at the Shenzhen plant of the Merry Electronics Co., a manufacturer of mobile phone parts, went on strike. Influenced by events at Honda and Foxconn, they successfully demanded pay increases and concessions from their employers. Soon afterwards, laborers on mainland China went on strikes up and down the nation. Violent clashes erupted at a Taiwan owned plant in Kunshan, injuring dozens. At the same time, mainland China's National Federation of Trade Unions issued an emergency memorandum, asking Taiwan and foreign-funded enterprises to set up trade unions as soon as possible. It stressed the need to promote collective bargaining to defend the interests of assembly line workers.

The wave of strikes that have occurred during the spring and summer of 2010, can be expected to spread and lead to a wave of economic and social changes. Looking forward, the attractness of the Chinese mainland as the World's Factory will be diminished. Foreign and Taiwan-owned enterprises on mainland China may decide to relocate. In any event, those entrepreneurs who remain may need to change their thinking about cheap labor. The mainland Chinese government may also need to change its habit of blindly oppressing the labor movement.

History can often turned on an accident. A series of suicide leaps occurred at Foxconn. Actually Foxconn is not some notorious sweatshop. But the mainland Chinese practice of "surrounding villages with factories," the militarization of management, the dysfunctional culture of mechanized assembly lines, and the fragile psychology of the "Post Nineties" generation, have led to complications. Fortunately, Foxconn is a reputable company with enough redeeming virtues to ensure that the outside world will see the truth. It also has sufficient resources to respond to the demands of labor and society. The Foxconn Group's share prices fell despite the pay raises. But in the long run, Foxconn's rapid response was much more sensible than procrastination.

By contrast, the three week long strike at the Honda Foshan factory is making Beijing even more nervous. It is more organized in its form, and more radical in its methods. It has completely paralyzed Honda's mainland China production line, and cost the company 30 billion RMB in operational losses. It has forced management to change its hard-line stance and increase workers' wages. Compared to the dozen suicide leaps at Foxconn, the Honda workers strike is far more virulent. The workers' "plant walk" tactic has been widely emulated. Once it spreads, the government and businesses will find it difficult to deal with.

In ten short years mainland China has become the World's Factory. It is already the prime mover of the global economy. But this miracle has its downside. Foreign capital has created new jobs. It has turned surplus rural population into low-cost labor. But it has also increased society's sense of comparative deprivation. With mainland China becoming more open, such domestic and foreign class differences have become increasingly acute. If the wage system and trade unions fail to adjust, such forms of "soft exploitation" rooted in the division of labor and subcontracting will be difficult to sustain.

Now is a good time to take advantage of a booming economy and a positive economic outlook. Beijing should seek opportunities to gradually permit the formation of trade unions, giving them a greater say in labor disputes. Otherwise, once labor unrest intensifies, protesters will begin pointing the finger at the government, creating an unbearable burden on those in power. Take the Henan Pingmian Textile Group for example. Workers went on strike there around the same time as Honda. But because this mainland Chinese enterprise was located in the remote inland region, it was forcibly suppressed by local government. The group was once an SOE, restructured as a public company. During the restructuring process, workers were deprived of their equity rights. If the problem is swept under the rug, it will merely generate greater resentment.

For the past 10 years companies all over the world have competed to set up factories on mainland China. What matters to them is cheap local labor. But with economic growth and increased labor awareness, the boom will inevitably recede. Once the domestic market begins to grow, mainland China will have to find a way to shed its "World's Factory" label. After all, turning its people into cheap OEM labor for foreign manufacturers is merely the first phase of the "first become rich" strategy. Now it must turn its attention to matters of equity and justice.

The Foxconn and Honda incidents have inspired a mainland Chinese labor movement. This movement shows no signs of abating.

2010.06.10 02:03 am










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