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Toyota president open to raising wages in China

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Toyota president open to raising wages in China

Dan Strumpf / Associated Press

Nagoya, Japan -- Toyota Motor Corp. is open to raising the wages of workers in China, where a series of strikes have disrupted its operations in that fast-growing market, the automaker's president said today.

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 in China, 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 U.S. reporters at a Toyota museum in this central Japanese city.

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 China, 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 and last year overtook the U.S. as the world's largest car market.

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.

Toyota Executive Vice President Shinichi Sasaki told reporters that the company is still a newcomer in China and said it 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."

From The Detroit News: http://detnews.com/article/20100709/AUTO01/7090402/1148/auto01/Toyota-president-open-to-raising-wages-in-China#ixzz0tBjT1XwC

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