RPT-UPDATE 3-Workers strike at another auto parts plant in China

(Repeats story filed on July 21 to additional subscribers)

* Omron workers say demanding pay rise of 40 pct or more

* About 400-500 employees walk off the job -workers

* More strikes likely as summer heats up – analyst

* Omron shares down almost 3 pct, broader market softer
(Adds worker, analyst quotes)

GUANGZHOU, China, July 21 (BestGrowthStock) – Workers at Japanese
electronics maker Omron’s (6645.OS: ) southern China factory have
gone on strike, the latest disruption in the manufacturing hub
over demands for better wages and working conditions.

The burst of disputes that started in May has since
affected more than a dozen mostly foreign-owned factories,
raising questions about the region’s future as a low-cost
manufacturing base.

The Omron strikers, who walked off the job on Wednesday
morning, are demanding a pay raise of at least 40 percent from
their current salary of 1,270 yuan, with some workers saying
they want an increase of 500 yuan ($74) per month and another
saying the demand is for 800 yuan more.

One of the strikers, who declined to give their names
because of concerns about retribution, said the factory makes
mainly switches and ignition keys for Honda Motor (7267.T: ),
Ford (F.N: ), BMW (BMWG.DE: ) and other car makers.

A spokesman from Omron said 200-300 of its 800 workers had
gone on strike at its Guangzhou plant, while workers said the
number of strikers was more like 400-500.


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Beijing, which normally stamps out any kind of grassroots
movement fearing a threat to stability and Communist Party
rule, appears to be willing to tolerate the strikes, in part
because they dovetail with many wider political goals.

Higher wages help boost potential for domestic consumption,
could rein in anger over a growing rich/poor gap, and help the
country move up the value chain away from cheap manufacturing.

Southern Guangdong province, the country’s export hub, is
even drafting a new law that the official Xinhua agency said
would be the first in the country to set rules for wage
negotiations and labour disputes.

All was quiet at the factory in the city of Guangzhou,
capital of Guangdong province, on a rainy Wednesday as a
tropical storm approached.

Some 10 people were gathered on a balcony at the plant,
including one holding a sign with a mobile phone number to
call. Others remained in the building, peering out of windows.

“The cost of living in Guangzhou is rising but our wages
from the factory aren’t increasing at the same pace,” said one
woman who has been working at Omron for two years. “That’s why
we’re asking for an increase.”

“Management hasn’t threatened to fire us. But neither side
wants to back down,” said another worker. “If we don’t hear
anything back we will go back on strike tomorrow.”

Omron shares extended losses on news of the strike to end
down 3 percent at 1,982 yen in Wednesday trading in Tokyo.


Japanese firms, the targets of many strikes, may be
particularly vulnerable as many rely on single suppliers from
affiliated companies, making it difficult to find alternatives
if production is disrupted, said Koji Endo, an analyst at
Advanced Research Japan.

“Workers know that well. That is why they think parts
makers would have to agree on a pay raise if there is a
strike,” he said. “For Western companies, they can just shun
the parts maker if there is a strike and move on to another

More strikes are likely in the coming months, particularly
as the summer heat makes it uncomfortable to work on southern
China’s production lines.

“You have to consider that it is now summer,” said Geoffrey
Crothall of the China Labour Bulletin. “In a lot of the
strikes, one of the demands has been for better working
conditions, and in summer it often becomes unbearable because
management (at Chinese plants) is too cheap to have proper
air-conditioning and ventilation in the factories.”

Most of the recent strikes have been resolved, but the one
at the Omron factory comes as stoppages resume after a brief
period of relative calm in early July.

A week-old strike at a plant supplying gear sticks to Honda
appeared to be moving toward resolution, as management agreed
to a 500 yuan per month raise that workers had been demanding,
a worker told Reuters by phone on Wednesday.

That strike, at a factory owned by Atsumitec Co. in the
city of Foshan, began last week and has resulted in an extended
stand-off between management and the factory’s 200 workers.

Stock Market Research Tools

(Reporting by Hong Kong, Beijing and Tokyo newsrooms; Writing
by Don Durfee and Doug Young; Editing by Ken Wills, Valerie Lee
and Lincoln Feast)

RPT-UPDATE 3-Workers strike at another auto parts plant in China