Cars

Toyota 'open' to increasing salaries

By Dan Strumpf (China Daily)
Updated: 2010-07-10 10:09

NAGOYA, Japan - Toyota Motor Corp is open to raising the wages of workers in China, where a series of strikes have disrupted its operations, the automaker's president said on Friday.

Akio Toyoda said raising wages in China would bring some benefits, like helping to create a middle class of consumers who can go out and buy Toyota vehicles.

He said managers and workers need to communicate better, adding that they share the same goal of building quality vehicles.

"It's not all bad for us" to raise the wages of Chinese workers, Toyoda told a group of US reporters at a Toyota museum in this central Japanese city.

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Toyota, as well as rival Honda Motor Corp, have been forced to halt production repeatedly at car assembly plants in China since mid-May because of strikes at affiliated suppliers.

The strikes have since inspired labor unrest at a number of other foreign-operated factories in the country, where workers complain of low wages and poor conditions.

China is a popular location for international companies to locate their production because they often enjoy a lower cost of labor there. It is also one of the fastest-growing automotive markets, which overtook the US as the world's largest car market last year.

But demands for higher wages and other rising costs are forcing some companies to rethink their China operations. Many are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries. A few Western corporations have even shifted some production back home.

Shinichi Sasaki, Toyota's executive vice-president, told reporters that the company is still a newcomer in China and is still working to understand that market.

"We really have to understand the mindset of the Chinese workers in our personnel management," Sasaki said. "We are a young company in China."

Associated Press