Toyota Shuts China Plant Struck By Workers
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Toyota Motor halted production at a car factory in China on Tuesday for the second time this month after workers at a supplier staged a walkout.
It was the latest in a string of strikes that has hit Japanese carmakers just as they look to increase production in China, the world’s biggest auto market.
The supplier, an auto parts manufacturer in southern China that makes sensors and electronic control parts, has stopped shipping parts to Toyota
Toyota Motor halted production at a car factory in China on Tuesday for the second time this month after workers at a supplier staged a walkout.
It was the latest in a string of strikes that has hit Japanese carmakers just as they look to increase production in China, the world’s biggest auto market.
The supplier, an auto parts manufacturer in southern China that makes sensors and electronic control parts, has stopped shipping parts to Toyota
since workers started striking on Monday, demanding higher pay, said Ririko Takeuchi, a Toyota spokeswoman in Tokyo.
A Toyota affiliate owns the parts maker, Denso Guangzhou Nansha, and employs about 1,100.
Toyota has been racing to add capacity in China after sales lagged behind rivals’ last year.
Toyota’s sales in China rose 21 percent, to 709,000 units in 2009, according to this article in the New York Times.
But it still trails rivals like General Motors, whose sales surged 67 percent that year to 1.8 million.
Toyota has said it expects sales to reach 800,000 units this year.
In Japan, the recent strikes have raised the prospect that the era of ultralow wages in China is coming to an end,
requiring companies that had looked to China for low-cost labor to reassess their production plans.
A decision by Beijing to let its currency appreciate will also lead to rising production costs.
Toyota operates 10 factories in China, and many more are run by Toyota subsidiaries.
Despite the consequences for production costs, a rise in wages in China is also welcome news for many Japanese companies,
which look to China’s booming market to make up for falling sales at home as Japan’s population ages.
Early on Tuesday, before the start of the factory’s day shift, Toyota decided to suspend operations at the factory, Ms. Takeuchi said.
The plant, which makes the Camry, Yaris and Highlander, was to remain closed through its night shift, she said.
“It is not clear when we can restart,” Ms. Takeuchi said.
A wave of strikes has affected Japanese automakers in China in the last weeks, first at Honda Motor, then at Toyota, both of which have sizable manufacturing operations in the country.
Last week, Toyota closed a factory in the northeastern Chinese city of Tianjin for one day after workers held a strike at another parts supplier. Workers returned after Toyota agreed to review their wage levels.
The walkouts at Toyota suppliers followed a prolonged strike at a parts manufacturer for Honda last month, which shut down all four of its assembly factories in China. Honda agreed to increase wages 24 percent, and the workers have returned.
Workers in China have become more vocal in demanding pay increases as the country’s economy booms, pushing up inflation.
Higher investment and improved wages in poorer regions in western China, the result of government stimulus spending,
have also deterred workers from migrating to industrial regions on the coast, pushing up labor costs.
In a bid to spur domestic consumption, the Chinese government has also supported higher pay for factory workers, raising minimum wages across the country previously.
