Japan, July 20 (Reuters) – Honda Motor Co (7267.T), Japan’s No. 2 automaker, said on Tuesday it would launch a plug-in hybrid car and a battery electric model in the United States and Japan in 2012. (Reporting by Chang-Ran Kim)
Q+A: What does China labor unrest mean for firms?
(Reuters) – Honda Motor Co said workers at a Chinese supplier factory have been on strike since July 12, in a fresh flare-up of labor disputes that have revealed an increasing assertiveness among China’s workers.
Walkouts have disrupted production at factories supplying major foreign firms including auto makers Toyota and Honda for several weeks this summer.
Here are some questions and answers about what this could mean for foreign companies operating in or sourcing from China:
HOW SERIOUS ARE THE STRIKES?
So far the high-profile strikes appear to be spontaneous movements at individual plants, by just a tiny sliver of a vast workforce. The earlier strikes have ended after workers accepted offers of improved pay and conditions, often less than they initially demanded.
Many of the strike-hit factories are parts suppliers for vehicle plants run by Japanese firms and local joint-venture partners, though an electronics maker and a plant producing air conditioning systems for U.S.-listed Ingersoll-Rand Plc have also been affected.
China’s ruling Communist Party is wary of wider unrest that could erode its grip on power, and would quickly seek to snuff out any signs that these strikes were igniting wider confrontation or generating coordinated worker movements.
But many striking workers say they took inspiration from hearing about the success of earlier walkouts. The copy-cat chain of strikes shows a workforce that is becoming bolder, and that may prompt some companies to pre-emptively raise wages.
“The strikes have been concentrated in a few areas and companies, but there are broader pent-up problems,” said Chang Kai, a labor relations professor at Renmin University in Beijing who advised workers striking at a Honda parts factory.
“Rather than just focus on the strikes, we need to address the broader problems,” he said.
SO WHAT DO THE STRIKES SHOW?
The strikes are a symptom of a broader trend that many investors will have to consider: a Chinese workforce becoming more assertive and selective, and sometimes inclined to protest by strikes, slow-downs and, most often, quitting.
Government numbers show that registered labor disputes have been rising.
The recent strikers have mostly been members of China’s 150 million strong migrant labor workforce, which flows from villages to cities and industrial regions looking for work.
Younger migrant workers are becoming more demanding about job conditions than their parents. They see their futures in the cities, not in farming, and feel the pressure to save up money despite rising costs.
They are also gaining more bargaining power as the flow of potential job seekers tightens, because of wider opportunities and fewer entrants into the workforce as the population ages.
SO IS THIS THE END OF CHINA AS A CHEAP PRODUCTION BASE?
Not really. Labor costs in China have been rising anyway and, partly encouraged by officials who want to turn farmers and workers into confident consumers, that is likely to continue.
In itself, the trend will not dislodge China as a dominant player in manufactured exports. Labor costs remain a fraction of the cost of goods made in China.
But rising overall costs, and the risk that strikes could force sudden jolts in wage levels, could prompt more companies to move production from crowded coastal regions to cheaper inland parts of China, or to other low-cost manufacturing countries such as Vietnam.
“China is still an attractive option for most companies looking for an effective manufacturing base, although many companies have been pursuing a China plus one or a China plus two strategy in recent years to diversify their manufacturing operations,” said Geoffrey Crothall of the China Labor Bulletin in Hong Kong, which advocates for improved workers’ rights.
“I really don’t think we’re going to see companies suddenly leaving China en masse.”
WHAT ABOUT SUPPLY CHAINS?
Honda and Toyota have both been forced to temporarily suspend vehicle assembly plants in China in recent weeks, because strikes at suppliers choked off the flow of parts.
Their tight supply chains, modeled on the “just-in-time” system, exposed them to disruption, said Wen Xiaoyi, a researcher at the China Institute of Industrial Relations in Beijing who studies labor relations in China’s automotive sector.
The risk of such disruption may prompt some to reconsider inventories management and diversity of suppliers, said Wen.
Vincent Chen, an analyst at Yuanta Securities in Taipei, said foreign tech manufacturers in China typically have about three to four weeks of inventory, which should last them through a strike.
“The biggest fear right now for brands is what is going to happen if one of their weaker suppliers gets hit,” said Chen.
But Nissan’s CEO Carlos Ghosn has said he does not see any reason to change the way inventory is held at Chinese plants. Other vehicle makers have echoed his view, saying strikes are just one of many contingencies that could disrupt supplies.
WILL THE GOVERNMENT STEP IN MORE?
The outburst of labor unrest could prompt the central government, wary of unrest spreading, to become more energetic about wage and labor standards, which have been patchily enforced by local officials worried about deterring investors.
The unrest could also boost government efforts to encourage more systematic collective bargaining between workers and managers to determine wages and conditions.
Pemier Wen Jiabao has said migrant workers deserved better treatment. The Communist Party will remain staunchly opposed, however, to the idea of independent unions.
Official unions will remain under the thumb of the government, but at the factory level they may become more insistent on workers’ demands.
Honda: affiliated supplier’s China plant on strike
(Reuters) – Honda Motor Co (7267.T) said workers at a Chinese factory owned by unlisted affiliate Atsumitec Co have been on strike since July 12, with no resolution reached as of Thursday.
Japan’s No.2 automaker, which has been plagued by supplier strikes since late May, said its four car plants in China were operating as usual with inventory. A spokeswoman in Tokyo said Atsumitec’s factory, in Foshan, Guangdong province, supplies shift levers to Honda’s local plants.
(Reporting by Chang-Ran Kim)
Honda: affiliated supplier’s China plant on strike
July 15 (Reuters) – Honda Motor Co (7267.T) said workers at a Chinese factory owned by unlisted affiliate Atsumitec Co have been on strike since July 12, with no resolution reached as of Thursday.
Japan’s No.2 automaker, which has been plagued by supplier strikes since late May, said its four car plants in China were operating as usual with inventory. A spokeswoman in Tokyo said Atsumitec’s factory, in Foshan, Guangdong province, supplies shift levers to Honda’s local plants. (Reporting by Chang-Ran Kim)
Yamaha Motor seeks top share in electric motorbikes
July 14 (Reuters) – Japan’s Yamaha Motor Co (7272.T) unveiled a new electric motorcycle on Wednesday, saying it wanted to lead the nascent market for the zero-emission vehicles with a global share of about 20 percent in 2020.
Yamaha Motor, the world’s No.2 motorcycle maker behind Honda Motor Co (7267.T), said it would begin sales of the EC-03 electric commuter vehicle in Japan starting September, and in Taiwan and Europe in 2011.
The model, priced at 252,000 yen ($2,842) in Japan, is similar in size to a 50cc scooter.
Annual demand for electric motorcycles in the three markets is forecast to balloon to 300,000 to 500,000 units in the mid-2010s, from around 10,000 now, Chief Executive Hiroyuki Yanagi told reporters at the unveiling in Tokyo.
Yamaha Motor said it expected demand to swell in China, bringing global appetite to around 1.5 million units a year by 2020. China is already the biggest market for electric bicycles with estimated annual sales of more than 20 million units.
Honda said earlier this year it would begin lease sales of a zero-emission motorbike in Japan in December, with an eye to eventually taking on rivals in China. Honda is aiming to market its yet-to-be-priced EV-neo to commercial users. [ID:nTOE63C005]
Yamaha Motor plans to introduce three or four electric motorcycle models by mid-decade, expanding the line-up towards 2020.
The EC-03, which uses lithium-ion batteries made by Sanyo Electric Co (6764.T), can be driven 43 km (26.7 miles) on a full charge. Yamaha Motor is targeting sales of 1,000 units in Japan in the first year.
Yamaha Motor had discontinued a range of electric scooters sold between 2002 and 2006 in Japan after their lithium-ion batteries, made by a unit of Hitachi Ltd (6501.T), were recalled.
Honda’s EV-neo will use batteries made by Toshiba Corp (6502.T). (Reporting by Kentaro Sugiyama and Chang-Ran Kim; Editing by Joseph Radford)
FACTBOX-China labour strikes developments, June 29
June 29 (Reuters) – Discontent among China’s estimated 150 million strong pool of migrant workers, who have helped power the country’s growth, threatens to undermine the government’s legitimacy and erode the nation’s competitiveness as a low-cost factory hub. [ID:nSGE65103V])
Stocks
Following are recent developments — 0600 GMT on Tuesday (* new or updated items):
* Industrial conglomerate Ingersoll-Rand Plc (IR.N) said a three-day work stoppage involving workers at a Zhongshan factory in southern China had ended. The plant, which makes commercial air conditioning systems for Trane — an air-conditoning systems maker that Ingersoll-Rand acquired in 2008 — returned to production as of Saturday (June 26) the firm said.
- Striking workers at a Denso (Guangzhou Nansha) Co Ltd factory said they had reached agreement with management on June 25 after Denso promised a pay rise of 800-900 yuan per month. [ID:nTOE65O067]
Workers had returned to full production earlier on expectations they would reach an agreement.
The factory, owned by Japan’s Denso Corp (6902.T), supplies fuel injection equipment and other parts to Toyota, Honda and other car makers. It stopped shipping to customers on June 21.
Pay for most workers is 1,100-1,300 yuan ($162-$191) a month. A technicians’ basic salary was around 3,000 yuan before the pay rise, according to one Denso worker.
Toyota Motor Corp (7203.T) said on June 25 it planned to resume production at its 360,000 units-a-year joint venture car plant in Guangzhou on Monday, expecting supply to flow again from the Denso factory. The GAC Toyota Motor factory had been suspended since June 22.
- A 1-day strike at NHK-UNI Spring (Guangzhou) Co Ltd ended late on June 23. The plant, 60 percent-owned by Japan’s NHK Spring (5991.T) and 40 percent by a Taiwanese firm, makes suspension springs and stabilisers for nearby assembly plants of Honda Motor Co Ltd (7267.T), Toyota and Nissan Motor Co (7201.T).
Honda said production at south China car plants, suspended due to the strike, restarted on June 24. Media had reported a Nissan factory in Guangzhou halted production briefly on Wednesday because of the walkout. [ID:nTST000228]
- Toyota’s Tianjin factory, held jointly with Chinese carmaker FAW (000800.SZ), resumed output on June 21 after the strike-hit Toyota-affiliated parts maker TOYODA GOSEI CO (7282.T) said it reached an agreement with workers. Toyoda Gosei said workers agreed to extra allowances for working in the summer heat and for a perfect attendance record, on top of an original 20 percent wage increase.
- Honda affiliate NIHON PLAST (7291.T) said on June 21 it settled a labour dispute with workers at its Zhongshan plant, which produces plastic parts including steering wheels. The plant resumed production late on June 18 after a strike the previous day. [ID:nTOE65K01Y]
- Denmark’s Carlsberg (CARLb.CO) said a strike at a brewery it part-owned in the southwestern city of Chongqing ended when workers returned to work on Friday (June 18).
- Honda saw an unusually long 3-week stoppage at its wholly owned parts factory in Foshan when 1,900 workers downed tools demanding better pay. After violent clashes and a management move to hike pay by 24 percent, most returned to work on June 4.
- Some 1,500 workers at Honda parts supplier Honda Lock, walked off the job on June 9, demanding a 700 yuan rise in basic wages and the establishment of an independent trade union among other conditions.
Workers rejected an intial offer, but agreed to return to work on June 15 in anticipation of an improved deal. In the end, however, management refused to grant more than a 280 yuan rise in wages and benefits, which was grudgingly accepted by most.
(Compiled by Alison Leung and James Pomfret in Hong Kong, Valerie Lee in SINGAPORE and Chang-Ran Kim in TOKYO, editing by Jonathan Thatcher)
Nikkei turns negative as yen advances
(Reuters) – Japan’s Nikkei average slipped 0.6 percent on Tuesday, erasing earlier gains as exporters fell on a stronger yen and charts remained grim, with the benchmark poised for its worst quarter since Lehman Brothers failed in 2008.
The Nikkei’s MACD continued to face downward after a sustained rise, while its slow stochastic, which gives near-term signals on market trends, also appeared set to dip after flattening in oversold territory.
Market players also said trade will likely remain thin, after volume hit a four-month low on Monday, as the market awaits a series of economic indicators this week including the Bank of Japan’s quarterly “tankan” survey of corporate sentiment on Thursday and U.S. jobs data on Friday.
The dollar fell 0.5 percent to 88.92 yen and the euro lost 0.5 percent to 109.10 as Japanese exporters repatriated profits before the second quarter ends later this week.
“The current dollar level is pretty tough for the market, and when the day’s falls in Shanghai stocks are added in the impact is significant,” said Noritsugu Hirakawa, a strategist at Okasan Securities.
“This whole situation is fanning fears about Japanese results.”
Shanghai shares fell 1.8 percent, and the benchmark Nikkei is poised to book its worst quarter since October-December 2008 as European debt worries pushed investors to curb their willingness to bet on risky assets, including equities.
The Nikkei shed 49.59 points to 9,644.97, with the broader Topix slipping 0.4 percent to 857.42.
For the quarter ending Wednesday, the index has shed about 12 percent so far, compared with a 21 percent drop in the quarter that finished in December 2008, following the collapse of Lehman Brothers.
Canon Inc lost 1.3 percent to 3,440 yen and Honda Motor Co fell 0.8 percent to 2,663 yen. Tokyo Electron shed 0.6 percent to 5,050 yen.
Nikkei turns negative as yen advances
TOKYO, June 29 (Reuters) – Japan’s Nikkei average slipped 0.6 percent on Tuesday, erasing earlier gains as exporters fell on a stronger yen and charts remained grim, with the benchmark poised for its worst quarter since Lehman Brothers failed in 2008.
The Nikkei’s MACD continued to face downward after a sustained rise, while its slow stochastic, which gives near-term signals on market trends, also appeared set to dip after flattening in oversold territory.
Market players also said trade will likely remain thin, after volume hit a four-month low on Monday, as the market awaits a series of economic indicators this week including the Bank of Japan’s quarterly “tankan” survey of corporate sentiment on Thursday and U.S. jobs data on Friday.
The dollar fell 0.5 percent to 88.92 yen JPY= and the euro lost 0.5 percent to 109.10 EURJPY=R as Japanese exporters repatriated profits before the second quarter ends later this week.
“The current dollar level is pretty tough for the market, and when the day’s falls in Shanghai stocks are added in the impact is significant,” said Noritsugu Hirakawa, a strategist at Okasan Securities.
“This whole situation is fanning fears about Japanese results.”
Shanghai shares .SSEC fell 1.8 percent, and the benchmark Nikkei is poised to book its worst quarter since October-December 2008 as European debt worries pushed investors to curb their willingness to bet on risky assets, including equities.
The Nikkei .N225 shed 49.59 points to 9,644.97, with the broader Topix slipping 0.4 percent to 857.42.
For the quarter ending Wednesday, the index has shed about 12 percent so far, compared with a 21 percent drop in the quarter that finished in December 2008, following the collapse of Lehman Brothers.
Canon Inc (7751.T) lost 1.3 percent to 3,440 yen and Honda Motor Co (7267.T) fell 0.8 percent to 2,663 yen. Tokyo Electron (8035.T) shed 0.6 percent to 5,050 yen.
Nikkei turns negative as yen advances
(Reuters) – Japan’s Nikkei average slipped 0.6 percent on Tuesday, erasing earlier gains as exporters fell on a stronger yen and charts remained grim, with the benchmark poised for its worst quarter since Lehman Brothers failed in 2008.
The Nikkei’s MACD continued to face downward after a sustained rise, while its slow stochastic, which gives near-term signals on market trends, also appeared set to dip after flattening in oversold territory.
Market players also said trade will likely remain thin, after volume hit a four-month low on Monday, as the market awaits a series of economic indicators this week including the Bank of Japan’s quarterly “tankan” survey of corporate sentiment on Thursday and U.S. jobs data on Friday.
The dollar fell 0.5 percent to 88.92 yen and the euro lost 0.5 percent to 109.10 as Japanese exporters repatriated profits before the second quarter ends later this week.
“The current dollar level is pretty tough for the market, and when the day’s falls in Shanghai stocks are added in the impact is significant,” said Noritsugu Hirakawa, a strategist at Okasan Securities.
“This whole situation is fanning fears about Japanese results.”
Shanghai shares fell 1.8 percent, and the benchmark Nikkei is poised to book its worst quarter since October-December 2008 as European debt worries pushed investors to curb their willingness to bet on risky assets, including equities.
The Nikkei shed 49.59 points to 9,644.97, with the broader Topix slipping 0.4 percent to 857.42.
For the quarter ending Wednesday, the index has shed about 12 percent so far, compared with a 21 percent drop in the quarter that finished in December 2008, following the collapse of Lehman Brothers.
Canon Inc lost 1.3 percent to 3,440 yen and Honda Motor Co fell 0.8 percent to 2,663 yen. Tokyo Electron shed 0.6 percent to 5,050 yen.
CLEVELAND & LOS ALTOS, Kalifornien, USA–(Business Wire)–
TOKYO, June 29 (Reuters) – Japan’s Nikkei average slipped 0.6 percent on Tuesday, erasing earlier gains as exporters fell on a stronger yen and charts remained grim, with the benchmark poised for its worst quarter since Lehman Brothers failed in 2008.
The Nikkei’s MACD continued to face downward after a sustained rise, while its slow stochastic, which gives near-term signals on market trends, also appeared set to dip after flattening in oversold territory.
Market players also said trade will likely remain thin, after volume hit a four-month low on Monday, as the market awaits a series of economic indicators this week including the Bank of Japan’s quarterly “tankan” survey of corporate sentiment on Thursday and U.S. jobs data on Friday.
The dollar fell 0.5 percent to 88.92 yen JPY= and the euro lost 0.5 percent to 109.10 EURJPY=R as Japanese exporters repatriated profits before the second quarter ends later this week.
“The current dollar level is pretty tough for the market, and when the day’s falls in Shanghai stocks are added in the impact is significant,” said Noritsugu Hirakawa, a strategist at Okasan Securities.
“This whole situation is fanning fears about Japanese results.”
Shanghai shares .SSEC fell 1.8 percent, and the benchmark Nikkei is poised to book its worst quarter since October-December 2008 as European debt worries pushed investors to curb their willingness to bet on risky assets, including equities.
The Nikkei .N225 shed 49.59 points to 9,644.97, with the broader Topix slipping 0.4 percent to 857.42.
For the quarter ending Wednesday, the index has shed about 12 percent so far, compared with a 21 percent drop in the quarter that finished in December 2008, following the collapse of Lehman Brothers.
Canon Inc (7751.T) lost 1.3 percent to 3,440 yen and Honda Motor Co (7267.T) fell 0.8 percent to 2,663 yen. Tokyo Electron (8035.T) shed 0.6 percent to 5,050 yen.
Toyota chief makes less than Nissan, Honda CEOs
June 25 (Reuters) – Toyota Motor (7203.T) chief Akio Toyoda’s pay package was below 100 million yen ($1.1 million) last year, less than what his peers at Honda Motor (7267.T) and Nissan Motor (7201.T) made, securities filings showed.
Stocks | Global Markets | Cyclical Consumer Goods
Toyoda, grandson of company founder Kiichiro Toyoda, was not among the four Toyota executives whose total compensation in the year to March exceeded 100 million yen. Listed Japanese companies must reveal executive pay above 100 million yen starting this year.
Toyoda, whose pay was not disclosed, owns nearly 4.6 million Toyota shares, worth 14.6 billion yen at Thursday’s close.
Toyota’s best-paid executive was Chairman Fujio Cho, with 132 million yen, followed by Toyota Motor North America President Yoshimi Inaba, in the limelight this year when he testified before U.S. Congress over the company’s recall scandal.
Toyota co-vice chairmen Katsuaki Watanabe and Kazuo Okamoto made 114 million yen and 108 million yen, respectively. The other 34 board members, including Toyoda, made an average 27.9 million yen ($311,300).
Among other Japanese auto executives, Honda Motor Co (7267.T) CEO Takanobu Ito took home 115 million yen as the sole executive at Japan’s No.2 automaker making the required disclosure. About a third of that came from Honda’s R&D unit, which he also headed until the end of March.
Nissan Motor Co (7201.T) paid its CEO, Carlos Ghosn, 890 million yen, making him one of the best-paid executives in Japan as well as the global auto industry. [ID:nTOE65K056] (Reporting by Chang-Ran Kim; Editing by Chris Gallagher)
UPDATE 1-Denso China parts plant partially restarted
June 24 (Reuters) – Denso Corp (6902.T), a parts maker affiliated with Toyota Motor Corp (7203.T), said it had partially restarted operations at a plant in Guangzhou, China, although wage negotiations were continuing.
Denso is aiming for an agreement as soon as possible, a company spokesman said.
Denso (Guangzhou Nansha) Co Ltd halted supply of its fuel injection equipment and other parts to Toyota, Honda Motor Co (7267.T) and other car makers on Monday after workers left production lines demanding higher wages and better benefits.
The strike has forced Toyota Motor’s plant in Guangdong province capable of producing 360,000 vehicles a year to stand idle since Tuesday.
Toyota said it was making preparations to resume production early next week. (Reporting by Yuko Inoue and Chang-Ran Kim; Editing by Edwina Gibbs)
Honda says south China car plant resumes production
June 24 (Reuters) – Honda Motor Co (7267.T) said on Thursday a south China car plant, which halted production due to a lack of parts from a strike at a supplier, has resumed operation.
Cyclical Consumer Goods
“All of our four car plants in China are running normally now,” said a Honda spokesman in China.
Honda halted operations at one of two plants at Guangqi Honda, one of the company’s joint ventures in China, due to a labour strike at its parts supplier Denso (Guangzhou Nansha) Co Ltd.
The halted plant has an annual production capacity of 240,000 units, and makes the Accord and Fit, among other models. (Reporting by Fang Yan and Jacqueline Wong)
Honda new hybrid to be cheapest one in Japan: report
(Reuters) – Honda Motor Co ‘s new hybrid car will cost one fifth less than the cheapest hybrid on the Japanese market, according to a newspaper report — a move that may make hybrids low profit margin models for automakers.
Gulf Oil Spill
The new car will cost around 1.5 million yen ($16,570), making it the cheapest hybrid in Japan when it goes on sale this autumn, the Nikkei business daily said.
It will cost about 400,000 yen less than the Insight, Honda’s other hybrid offering, and about 200,000 yen more than Honda’s popular gasoline-powered Fit compact car, it said.
“Lower prices are good for consumers but not for shareholders,” said Yoshihiko Tabei, an analyst at Kazaka Securities.
He added that the reported price was lower than the market had expected and could lead to a punishing price war with Toyota Motor Corp as well as put both automakers at a disadvantage when compared with rivals who just focus on higher margin gasoline-powered vehicles.
“Toyota has finally begun enjoying profits on the Prius and Honda is barely making profits on the Insight. It will be tough for them to make profits on hybrids.”
A Honda spokeswoman declined to comment on the report.
The new hybrid will be based on the Fit and share core components with the Insight, reducing Honda’s development costs, the Nikkei said, adding that it will be able to travel 30 kilometers on a liter of gasoline, compared with the Fit’s 24 kilometers per liter.
Price competition between Honda and Toyota in the growing hybrid car market has heated up since the debut of the Insight hybrid in February 2009, which was quickly followed by the launch of the cheapest-ever Toyota Prius hybrid.
The relatively low prices of the two latest flagship hybrids, as well as tax incentives for green cars, has helped popularize hybrid cars in Japan.
“With prices in the popular range of 1.5 to 1.6 million yen and with the performance of a conventional gasoline-powered vehicle, hybrids will be increasingly popular even without tax incentives,” Tabei said.
Shares of Honda dipped 0.6 percent to 2,704 yen while Toyota slipped 0.6 percent to 3,200 yen, underperforming the Nikkei stock average which inched up 0.2 percent.
(Additional reporting by Abhiram Nandakumar in Bangalore; Editing by Edwina Gibbs)
UPDATE 2-Honda new hybrid to be cheapest one in Japan -paper
TOKYO, June 24 (Reuters) – Honda Motor Co ‘s (7267.T) new hybrid car will cost one fifth less than the cheapest hybrid on the Japanese market, according to a newspaper report — a move that may make hybrids low profit margin models for automakers.
The new car will cost around 1.5 million yen ($16,570), making it the cheapest hybrid in Japan when it goes on sale this autumn, the Nikkei business daily said.
It will cost about 400,000 yen less than the Insight, Honda’s other hybrid offering, and about 200,000 yen more than Honda’s popular gasoline-powered Fit compact car, it said.
“Lower prices are good for consumers but not for shareholders,” said Yoshihiko Tabei, an analyst at Kazaka Securities.
He added that the reported price was lower than the market had expected and could lead to a punishing price war with Toyota Motor Corp (7203.T) as well as put both automakers at a disadvantage when compared with rivals who just focus on higher margin gasoline-powered vehicles.
“Toyota has finally begun enjoying profits on the Prius and Honda is barely making profits on the Insight. It will be tough for them to make profits on hybrids.”
A Honda spokeswoman declined to comment on the report.
The new hybrid will be based on the Fit and share core components with the Insight, reducing Honda’s development costs, the Nikkei said, adding that it will be able to travel 30 kilometres on a litre of gasoline, compared with the Fit’s 24 kilometres per litre.
Price competition between Honda and Toyota in the growing hybrid car market has heated up since the debut of the Insight hybrid in February 2009, which was quickly followed by the launch of the cheapest-ever Toyota Prius hybrid.
The relatively low prices of the two latest flagship hybrids, as well as tax incentives for green cars, has helped popularise hybrid cars in Japan.
“With prices in the popular range of 1.5 to 1.6 million yen and with the performance of a conventional gasoline-powered vehicle, hybrids will be increasingly popular even without tax incentives,” Tabei said.
Shares of Honda dipped 0.6 percent to 2,704 yen while Toyota slipped 0.6 percent to 3,200 yen, underperforming the Nikkei stock average .N225 which inched up 0.2 percent. ($1=90.51 Yen) (Additional reporting by Abhiram Nandakumar in Bangalore; Editing by Edwina Gibbs)
CORRECTED-UPDATE 1-New strike reported at China parts supplier
(Corrects multiple references to show that Denso (Guangzhou Nansha) Co Ltd is wholly owned by Denso Corp, not a joint venture. Inserts full name of Toyota joint venture in 6th paragraph)
Cyclical Consumer Goods
* Production at Denso parts plant halted because of strike
* Plant supplies parts to Honda, Toyota, others
* Strike the latest in a string of China labour disputes
By Yumiko Nishitani and Alison Leung
TOKYO/HONG KONG, June 22 (Reuters) – A strike has halted production at a Chinese factory owned by Japan’s Denso Corp (6902.T), a car parts maker affiliated with Toyota Motor Corp (7203.T), the latest in a string of work stoppages to hit foreign operations in China.
A strike at Denso (Guangzhou Nansha) Co Ltd had halted supply of its fuel injection equipment and other products to Toyota, Honda Motor Co (7267.T) and other carmaker clients since Monday, Denso spokeswoman Yoko Suga said.
The stoppage at the factory, located in China’s industrial heartland, is the most recent in a series of labour disputes across the country. In recent weeks, strikes have broken out at a supplier of locks to Honda, a Toyota Gosei plant and Chongqing Brewery Co Ltd., among others. All have since been resolved.
Management of company were negotiating with workers over demands for higher wages and better benefits, said Suga.
A spokesman for Honda China said car production at Honda’s Chinese car making joint venture was continuing as usual.
A GAC Toyota Motor Co spokesman was not immediately available for comment. GAC Toyota Motor is the Japanese carmaker’s Guangzhou joint venture.
The wage rises demanded by factory workers in China would add little to the cost of products made in China, meaning the country’s role as a manufacturing base appears secure. But the outbreak of disputes presents a tricky challenge for China’s ruling Communist Party, which has vowed to improve incomes but is jittery about protests.
China’s leaders, who are obsessed with maintaining social stability but also say they can ensure a better life for those at the bottom end of an expanding rich-poor gap, have muted coverage of labour disputes in state media while expressing public support for workers. (Additional reporting by Fang Yan, writing by Don Durfee; Editing by Chris Lewis)
PRESS DIGEST – Wall Street Journal – June 14
(Reuters) – The following were the top stories in The Wall Street Journal on Monday. Reuters has not verified these stories and does not vouch for their accuracy.
Stocks | Global Markets
* Ethnic violence flared out of control in Kyrgyzstan, threatening to destabilize what has been a conduit for troops and supplies for the U.S.-led war in Afghanistan.
* The race to profit from Asia’s growing appetite for corn, soybeans and other crops is resurrecting once-dormant disputes between two mainstays of the nation’s economy: Farmers and railroads.
* Economic woes in Europe and the accompanying decline in the euro are already digging into the profits of Asia’s manufacturers. The worry is that the pain will spread more broadly if European demand for Asian exports falters.
* Settlement talks between Dell Inc (DELL.O), its CEO and the SEC may help illuminate what role rebates from Intel Corp (INTC.O) played in the computer maker’s finances.
* AT&T Inc (T.N), reaching out to iPad users Sunday to explain why their email addresses were released last week, blamed the incident on “computer hackers” who “maliciously exploited” an attempt by the carrier to speed the process of logging in to its website.
* French and German banks continued to hold the greatest exposure to euro-zone countries facing market pressures at the end of last year, underscoring their interest in restoring investor confidence in the region.
* Investors are ignoring warning signs in the $2.8 trillion municipal-bond market, raising the risk of a reckoning, according to some market specialists.
* Some workers at a Honda Motor Co (7267.T) plant in southern China pressed ahead with a strike Sunday as part of a wave of labor unrest that poses a political challenge for the Communist Party, whose authority in the workplace is being undermined by independent labor activists.
* European Central Bank governor Athanasios Orphanides indicated in an interview with Dow Jones Newswires that interest rates in the euro zone will remain on hold for many months, urging European politicians to tackle yawning inefficiencies in fiscal governance.
* Chinese wind-turbine maker Xinjiang Goldwind Science & Technology Co has decided to shelve its $1.2 billion Hong Kong initial public offering because of volatile market conditions, a person familiar with the situation said Sunday.
WRAPUP 3-Striking Honda China workers hold out for pay, union
ZHONGSHAN, China, June 11 (Reuters) – Workers at a lock factory in southern China that supplies Honda Motor Co (7267.T) challenged managers on Friday, demanding higher pay and freedom to form independent unions, banned in the export powerhouse.
A wave of labour unrest has rippled across some foreign-owned factories in China as a new generation of migrant workers presses for more of the nation’s growing wealth. [ID:nTOE65902W]
Strikes were reported this week at a Taiwanese-owned sporting goods supplier in Jiangxi province, and at Japanese sewing machine maker Brother Industries (6448.T) in Xian — both far from China’s wealthier regions near Hong Kong and Shanghai.
The unrest is a worry for the Communist Party, which has long discouraged independent worker action and punished protesters.
President Hu Jintao and Premier Wen Jiabao have vowed to lift the incomes of hundreds of millions of farmers and workers, but officials are also trying to boost exports, which rely on cheap migrant labour drawn to Guangdong from poor villages inland.
The rising demands of those workers, especially pressure for autonomous unions, could present hard choices for the government, which treats such demands as a threat to precious stability.
“This is a signal to the government that it has to adapt to treating labour disputes as a part of economic life, not as a political threat,” said Wen Xiaoyi, a researcher at the China Institute of Industrial Relations in Beijing who specialises in the auto industry and has visited Honda plants in Guangdong.
“So far, I think the government has been relatively restrained … But if this spreads and the economic and political demands grow, that will test the tolerance of the government.”
The unrest could furnish another argument for Chinese officials opposed to allowing the yuan to rise in value — a demand that U.S. officials and lawmakers made with renewed vigour this week. [ID:nN10236564] Chinese-based exporters and their official backers have said that any rise would wipe out the thin profit margins of many companies.
Although labour makes up only a fraction of manufacturing costs in China, higher wages could force prices up and hurt the exporters that Beijing has tried to support by holding the currency steady since the global financial crisis worsened.
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For GRAPHIC on China labour: r.reuters.com/mep98k
Reuters Insider on wages: link.reuters.com/ryk39k
TAKE A LOOK on China labour disputes: [ID:nSGE65103V]
BreakingViews on lessons for China: [ID:nLDE6531FP]
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DISPUTES SPREAD
On Friday, about 500 workers gathered on the road outside Honda Lock, a Sino-Japanese joint venture that makes locks for Honda cars in Zhongshan near Macau, and refused to start work.
Their demands included higher pay, as well as the right to choose their own representation instead of having to use official state-sanctioned unions, seen as subservient to management.
Management representatives using loudhailers warned of “serious consequences”, and the crowd later dispersed after riot police blocking the road gave way and let people out of the area.
“They have no sincerity at all. They only agreed to increase wages by 100 yuan. We’re very disappointed,” said a 27-year-old migrant worker from Guangxi province, who gave his surname as Chen, straddling a red motorbike parked outside the factory.
“If we don’t resolve things by tomorrow, we probably won’t go back to work for another week,” he said, adding workers were calling for a base salary of over 2000 yuan per month, compared with the current level of 1,500 on average.
“The existing labour union is completely useless and never acted on behalf of the workers,” Chen said.
Both sides were still at an impasse late in the afternoon.
“The workers feel that their wages have been held too low for too long. Once you take away food and other costs, most of them are saving maybe 800 or 900 yuan ($117-$132) per month,” said Zhang Jun, an independent labour activist from the coastal city of Yantai who was in Guangdong to help strikers.
Confrontation at Honda follows a growing number of labour disputes in China that began in the affluent Pearl Delta area of Guangdong but have since shown signs of spreading to other areas.
Workers at the Honda Lock factory have been striking since Wednesday, the third factory supplying Japan’s No.2 automaker to go on strike in the past month.
Honda representatives in China said two car plants that were idled by the series of disputes were producing again on Friday, and production was expected to continue normally.
Some of the recent disputes have brought sizable pay increases to workers, including a 66 percent raise for workers at Foxconn (2038.HK), a subsidiary of Hon Hai, and 20 percent or more for workers in the first Honda strike.
Wen, the Beijing-based researcher, said the unrest could force car firms to rethink labour relations and supply chains.
“The Chinese motor vehicle sector has been learning Toyota’s just-in-time manufacturing model,” he said. “But now we’ve seen that the just-in-time model means any link in the chain is vulnerable to disruption and if one supplier stops, the whole manufacturing cycle has to stop.” ($1=6.830 Yuan) (Additional reprting by Chris Buckley in BEIJING; Fang Yan in SHANGHAI and Chang-Ran Kim in TOKYO; Writing by Chris Buckley, Lincoln Feast and Doug Young; Editing by Andrew Marshall)
UPDATE 1-Japan’s Brother restarts China output after strike
TOKYO, June 10 (Reuters) – Japan’s Brother Industries Ltd (6448.T) said it has restarted production at two industrial sewing machine factories in China on Thursday after a strike had forced it to halt output for about one week.
About 900 workers at the two plants in Xian launched the strike on June 3 seeking better pay and improved working conditions, halting production through Wednesday, Brother spokeswoman Mika Oshima said.
The plants restarted production on Thursday morning but a representative for the workers is still in negotiations with management on pay and conditions, Oshima said.
Brother gets the bulk of its sales from printers and other office equipment. Industrial sewing machines accounted for about 4 percent of its revenues in the past business year.
Honda Motor Co’s (7267.T) output in China has been hampered by a series of strikes at its suppliers, prompting concerns that unrest among workers in the world’s manufacturing hub is spreading. [ID:nTOE65801O]
Shares in Brother closed up 0.3 percent at 995 yen, underperforming a 1.1 percent rise in the benchmark Nikkei average .N225. (Reporting by Nathan Layne; Editing by Hugh Lawson)