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Monday 5 January 2009
Workers Bear Brunt of Vehicle Industry Slump
Workers in the mainland vehicle industry face a tough winter as car plants across the country shut down for extended holiday breaks to trim production in line with falling demand.
Kandy Wong and Daniel Ren in Shanghai 5 January 2009
Workers in the mainland vehicle industry face a tough winter as car plants across the country shut down for extended holiday breaks to trim production in line with falling demand.
Shanghai General Motors, Shanghai Volkswagen and Hong Kong-listed Brilliance China Automotive Holdings are suspending production as a way to reduce operating costs.
“Time off from work will be high in the next few months,” a factory worker for General Motors China Group said. “The factories have not shut down but the carmakers have just stopped producing and we aren’t required to go back to work for a while.
“The good days are gone. Now the focus has shifted to job security.”
But so far no lay-offs have been announced, according to car workers. A spokesman for GM China said the company constantly adjusted output to stay abreast of rapidly changing demand.
“Some models such as our newly launched Buick Regal and several popular Chevrolet models cannot keep up with demand, while demand for others is slower than our forecast,” the spokesman said.
“There will always be a few production lines that need to schedule time off while others need to put on overtime. That is just the dynamics of the business.”
Kevin Wale, president and managing director of GM China, earlier said the company had no plans to shed staff.
The latest data shows that total mainland vehicle sales in November slipped 14.6 per cent year on year to 685,100 units.
Passenger car sales declined 10.3 per cent to 522,800 units, and there is now little prospect that the car industry has achieved its sales target of 10 million vehicle for last year, with forecasters expecting no more than 9.3 million vehicles sold for the year.
Industry players expect only single-digit growth this year, in sharp contrast to the more than 20 per cent annual sales growth recorded over the past few years.
Sources said Shanghai GM, the joint venture of SAIC Motor Corp and GM China, had given workers on production lines of high-end models such as Park Avenue and Cadillac extra days off in the past few months.
“On some production lines, workers are down to just three or four days a week,” said a factory worker.
Compared with other industries, vehicle workers remain better off and employees at carmakers such as Shanghai GM received bonuses of up to 10 months’ salary last year.
“But nowadays some carmakers will ‘buy out’ staff,” said the factory worker who has worked in the industry for eight years.
“Staff will be offered a payout as a sort of pension and then be asked to leave.”
Last year was not the worst for the vehicle industry, he added. “The worst time was in 2003, when Sars broke out.”
Shanghai Volkswagen, a joint venture between SAIC and Volkswagen China, began its “New Year holiday” on December 23. While some company sources said the plant was forced to cut output to ride out the downturn, the carmaker denied reports that the move was a result of lacklustre sales.
Liaoning-based Brilliance China axed staff two months ago and was planning further cuts this year, according to several company insiders. But a company spokesman denied reports of lay-offs and said there would be no staff cuts this year.
Jianghuai Motor, Chery Automobile, Changan Ford Mazda, and Dongfeng Peugeot Citroen have also reduced staff, while FAW Tianjin Toyota, Guangzhou Toyota and Changan Mazda have cut output.
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Workers Bear Brunt of Vehicle Industry Slump
Kandy Wong and Daniel Ren in Shanghai
5 January 2009
Workers in the mainland vehicle industry face a tough winter as car plants across the country shut down for extended holiday breaks to trim production in line with falling demand.
Shanghai General Motors, Shanghai Volkswagen and Hong Kong-listed Brilliance China Automotive Holdings are suspending production as a way to reduce operating costs.
“Time off from work will be high in the next few months,” a factory worker for General Motors China Group said. “The factories have not shut down but the carmakers have just stopped producing and we aren’t required to go back to work for a while.
“The good days are gone. Now the focus has shifted to job security.”
But so far no lay-offs have been announced, according to car workers. A spokesman for GM China said the company constantly adjusted output to stay abreast of rapidly changing demand.
“Some models such as our newly launched Buick Regal and several popular Chevrolet models cannot keep up with demand, while demand for others is slower than our forecast,” the spokesman said.
“There will always be a few production lines that need to schedule time off while others need to put on overtime. That is just the dynamics of the business.”
Kevin Wale, president and managing director of GM China, earlier said the company had no plans to shed staff.
The latest data shows that total mainland vehicle sales in November slipped 14.6 per cent year on year to 685,100 units.
Passenger car sales declined 10.3 per cent to 522,800 units, and there is now little prospect that the car industry has achieved its sales target of 10 million vehicle for last year, with forecasters expecting no more than 9.3 million vehicles sold for the year.
Industry players expect only single-digit growth this year, in sharp contrast to the more than 20 per cent annual sales growth recorded over the past few years.
Sources said Shanghai GM, the joint venture of SAIC Motor Corp and GM China, had given workers on production lines of high-end models such as Park Avenue and Cadillac extra days off in the past few months.
“On some production lines, workers are down to just three or four days a week,” said a factory worker.
Compared with other industries, vehicle workers remain better off and employees at carmakers such as Shanghai GM received bonuses of up to 10 months’ salary last year.
“But nowadays some carmakers will ‘buy out’ staff,” said the factory worker who has worked in the industry for eight years.
“Staff will be offered a payout as a sort of pension and then be asked to leave.”
Last year was not the worst for the vehicle industry, he added. “The worst time was in 2003, when Sars broke out.”
Shanghai Volkswagen, a joint venture between SAIC and Volkswagen China, began its “New Year holiday” on December 23. While some company sources said the plant was forced to cut output to ride out the downturn, the carmaker denied reports that the move was a result of lacklustre sales.
Liaoning-based Brilliance China axed staff two months ago and was planning further cuts this year, according to several company insiders. But a company spokesman denied reports of lay-offs and said there would be no staff cuts this year.
Jianghuai Motor, Chery Automobile, Changan Ford Mazda, and Dongfeng Peugeot Citroen have also reduced staff, while FAW Tianjin Toyota, Guangzhou Toyota and Changan Mazda have cut output.
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