@Risk

After a string of work stoppages in May and June, it appeared that factory strikes in China were tapering off.

However, last Friday, Shanghai Daily reported that Chinese factory workers at two more suppliers for foreign automakers had walked out, demanding pay increases.

The strikes occurred at Atsumitec Co, which supplies Honda Motor Co.’s China operations, and at Japanese electronics maker Omron Corp, which supplies switches and ignition keys to Honda, Ford and other carmakers. Each was settled after the workers won what the article calls “hefty pay raises.” (more…)

General Motors is abandoning its traditional summer-shut down in order to keep up with buyer demand.

Typically, GM plants in the U.S. shut down for two weeks in late June-early July. But, last week the company announced that this year, most of its domestic plants will forego the traditional shut-down to help meet increasing demand from buyers.

The decision is expected to generate up to 56,000 additional vehicles. (more…)

In the wake of walkouts at several Chinese manufacturing facilities over the past few months, I’m starting to wonder about China’s future as a low-cost manufacturing base.

Most recently, the Toyoda Gosei plant, located just north of Beijing, was shut down by a one-day strike last Tuesday. Although short-lived, the work stoppage underscores growing employee discontent at the facility, and a strike resolution came only after managers agreed to discuss wage increases, Reuters reports.

A few days later, Honda Motor Co. was in the middle of a similar dilemma. The company had to re-negotiate wages to prevent a strike at Honda Lock (Guangdong) Co. in the Pearl River Delta  –and that wasn’t the first time Honda has had to respond to employee demands for better pay. According to Bloomberg Businessweek, wage concessions by Honda after walkouts that shut down three parts factories in the past month may erode the company’s net income by as much as five percent. (more…)

President Obama has signed a memorandum ordering federal agencies to prepare plans for the first fuel efficiency standards ever established for big-rig trucks.

Specifically, the memorandum orders the Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) to establish greenhouse gas emissions standards for commercial medium- and heavy-duty vehicles beginning with model year 2014. The goal is to issue a final rule by July 30, 2011. (more…)

For the first time in the ten-year history of the North American OEM/Supplier Working Relations Study conducted by Planning Perspectives, a U.S. automaker – Ford – is ranked in the top three OEMs.

The annual study tracks supplier perceptions of their working relations with the top three U.S. and top three Japanese automakers across 14 commodity purchasing areas. This year 646 sales personnel from 510 suppliers participated, providing data for nearly 2,500 buying situations.

Honda and Toyota, finished in first and second place, respectively.  Ford took the third spot.

Nissan continues to slip in the rankings, dropping to fourth place this year, while GM – in fifth place – continues showing strong, steady improvement.  Chrysler is also showing some improvement but is still in last place, the position it has held since 2008.

This study is significant because the results are used to calculate the Working Relations Index (WRI), and automakers with a higher WRI realize significantly greater benefits from their suppliers than those automakers with a lower WRI.

To calculate the WRI, Planning Perspectives ranks each OEM across 17 variables comprising five key categories: (more…)