The implications of Mercury's and GM's misadventures in brand marketing dominated the auto news this week, but as always there was lots more going on -- including what is likely to be a huge emerging story from China. Here are a few of the stories you might have missed:
All eyes on Honda
Several weeks ago, workers at a Honda (NYSE: HMC) transmission plant in Foshan, China, went on strike, demanding a significant increase in pay and benefits. The strike, which shut down all of Honda's Chinese production for about two weeks, was only settled after Honda offered workers a hefty 24% raise.
This week brought word of more labor unrest in China, including further action against Honda: A two-day strike at an exhaust systems maker that supplies Honda was resolved on Thursday, but striking workers at a Honda lock factory continued to hold out for higher wages on Friday.
China may be a communist country, but independent labor actions such as these are technically illegal. Still, the success of the initial strike against Honda has clearly emboldened other workers, who have begun taking action against other foreign employers as well as Honda. That's a worry for automakers such as Toyota (NYSE: TM) and Ford (NYSE: F) that are continuing to build out their presence in China, as well as for ... well, nearly every non-Chinese company that relies on low-cost Chinese manufacturing. Younger Chinese workers who have access to technology and global awareness -- and who know that workers doing similar jobs in, say, Japan, get paid a lot more than they do -- are clearly less willing to settle for low wages than were their fresh-off-the-farm forbearers.
Is the cost of manufacturing in China about to go up for everyone -- for good? Or will the Chinese government, worried about losing its exports edge, impose a crackdown? Either way, I suspect this story is going to get a lot bigger in coming weeks -- stay tuned.
General Motors explains its stupid Chevy memo, sort of
Thursday's New York Times report that Chevrolet executives were banning employees' use of the term "Chevy" on dubious-seeming grounds inspired a fair bit of snarky commentary. GM's PR flacks scrambled to respond, putting out a statement calling the memo "poorly worded" and saying that, "In no way are we discouraging customers or fans [of Chevy] from using the name."
While it's nice to hear that GM hasn't forbidden its customers and fans from using a name that it itself has used in advertising for decades (gosh, thanks guys), the statement from GM PR still fails to clarify what's really going on here. As near as I can tell, Chevrolet's sales and marketing people are worried that using the term "Chevy" in overseas markets where the Chevrolet brand is less well known might be confusing. I'm skeptical, but I admit that that explanation makes some sense.
But I'm still struggling to see the leap from worries about the clarity of overseas marketing communications to a requirement that Chevrolet employees in Detroit put a quarter in a jar every time they say "Chevy" out loud, as the Times reported. As I said yesterday, you'd think these folks would have bigger things to worry about right now.
BYD continues to talk big
BYD, the Chinese battery maker-turned-car-company partially owned by Berkshire Hathaway (NYSE: BRK-B), continues to press forward with its plans for world domination. Having recently announced that it will build its European headquarters in Germany, the backyard of the European auto industry, BYD continues to move forward with its long-standing plan to introduce its all-electric e6 sedan in the U.S. by the end of 2010 -- sort of.
BYD's U.S. marketing folks now say that while yes, U.S. sales will begin by the end of 2010, initial sales will be limited to "government agencies" in order to "gauge feedback". Sales to actual individual customers may (or may not) start at some point further down the road. But how many American "government agencies" will step up to buy an electric car from a mostly unknown-in-these-parts Chinese manufacturer when there are homegrown alternatives available from companies like Ford?
Hard to say, but I'm betting that the answer is likely to be "not very many".
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