Alpine Car Stereos

Qingdoa Daesung Electronic Corp. Ltd.
Xia Wang Bu Licang Qu Qingdao City
Shandong Province, China

 Summary: Top of the line Alpine car stereos, some costing up to $1,300 each, are made in China by young women who are paid 31 cents an hour and sit hunched over, staring into microscopes 9½ hours a day, six days a week, soldering the fine pieces of the stereo.  Above the women is an electronic scoreboard which monitors their progress in meeting their production quota of 720 stereos a day.


It’s Not Just Apparel and Sneakers. There Are High Tech Sweatshops

The Daesung Electronic Corporation moved to the city of Qingdao from South Korea in 1991, becoming just one of 3,000 South Korean investments currently in the city of Qingdao, most of them export assembly factories.  There are also 1,000 U.S. investments in Qingdao, which has 55 industrial parks within its city limits.  Every month 300 ships leave Qingdao’s port, carrying a total of $3.8 billion of cargo every year.

 There are 700 production workers at the Daesung factory, almost all of them young women from the surrounding area.  They are joined by 100 managers and research staff who are from South Korea.

 Daesung produces high tech electronic components such as motors, amplifiers, mobile pagers, beepers and car stereos.  Most of their work is for the auto industry.
When we visited the factory in July 1999, they were making Alpine car stereos which were exported to the U.S. through the port of Los Angeles.  

The average wage, the company said, was 500 rmb per month, $60.24 U.S.
 Average wage: (According to the company)
·       
27 to 31 cents an hour
·       
$2.31 a day (8.5 hours)
·       
$13.90 a week (for a 6-day, 45-51 hour workweek)
·       
$60.24 a month
·       
$722.89 a year


Alpine car stereos being made for 31 cents an hour

 

 

According to factory management, there is a 9½ hour daily shift, from 8:00 a.m. to 5:30 p.m., six days a week, with an hour off for lunch.  We could not independently confirm this with the workers, but if management was accurate, the workers would be in the factory 57 hours a week, while being paid for 51 hours.

 Management said that the base, or starting, wage was 360 rmb--$43.31 a month.  This would come to 20 to 22 cents an hour, depending upon whether they worked a 45 or 51-hour workweek.

 Daesung factory managers said that the fully loaded wage for a skilled worker—including all mandated social security benefits, transportation stipends, bonuses, etc.—came to $100 U.S. a month, $23.08 a week.  We were unable to verify any of these wage figures with the workers.

 The Daesung factory declared a profit of $400,000 in 1998, which was sent back to the parent company, which continues to operate two factories in South Korea.

 

A Walk Though the Factory:

Daesung Electonics is a high tech manufacturing company built with an initial investment of seven million dollars.  The factory was clean, air conditioned and full of the latest computerized equipment.  The young women workers were dressed in long white uniforms with matching white caps.

 They sat concentrating, bent over, staring into microscopes as they soldered the fine pieces of the Alpine car stereos, which moved along a U-shaped assembly line.  No one looked up;  no one talked;  no one smiled.  They worked very fast, and one could not help but think how exhausted these women must feel at the end of their shift after having stared into a microscope all day.  Above the women, an electronic scoreboard posted their daily production quota of 720 Alpine car stereos, and monitored the workers’ progress, comparing how many stereos they had completed up to that minute with how many they should have made in order to reach their quota by the end of the day.

 Alpine car stereo made in China retails at Circuit City for $179

 

The Daesung Electronics Corporation Came to China to Escape Unions

Unlike their North American counterparts, the South Korean factory managers were very direct and pulled no punches as to why they had relocated to China.  Daesung senior managers told us they moved to China to escape the labor movement and the high wages in South Korea, where the minimum wage is $1.60 an hour and the average manufacturing wage about $2.49 an hour.

 Daesung management spoke very glowingly of the All China FederationTrade Union—ACFTU—that is the official government-run union.  The said to us:  You have to understand, the ACFTU does not bargain for rights or wages.  This union is nothing like the unions in South Korea, or in the U.S.  The ACFU represents both management and labor, and really acts as a channel of communication so we know what the workers are thinking.”

 In fact, the government-controlled All China Federation Trade Union, functions as one giant company or yellow union, which actively collaborates with and provides cover for the authoritarian regime’s total denial of internationally recognized worker rights in China.  It is another burden the workers have to deal with, another nail in the trap.

Daesung management was full of the same complaints we heard in numerous other assembly factories: that in China, there were no clear laws; that regulations and standards varied from one local government office to another; that there was no way to know how the local bureaucrats would implement these shifting regulations, so in many cases you had to rely upon bribes, which made it essential to make friends with local government authorities and the police.

They complained that port charges in China—the ports are owned and operated by the government—are just as expensive as in South Korea.  Further, their Social Security payments for workers’ health, unemployment and pension benefits were becoming too high, and many investors were trying to avoid these expenses.

 Asked if there was a middle class in China and a possible market for their products, they responded “No, none, and there never will be under this government.”

 Still, despite all the problems, they said that Korean companies are racing to get into China before things change.  So it must be a good deal for them after all.

An Uninspiring Meeting with ACFTU 

The National Labor Committee met with officials from the All China Federation Trade Union (ACFTU) branch in Shanghai.

 It was not a very inspiring meeting, as they explained to us that ACFTU’s mission was “to relieve tensions between management and workers,” and to “cooperate with management to develop their enterprises.”  The ACFTU representatives explained that “both managers and workers are part of the union,” and were full of praise for the U.S. manufacturing companies moving to China.  Asked about the millions of layoffs from the state-owned enterprises, they responded, “it cannot be any other way.”  It was dropped at that.

 The All China Federation Trade Union, which is sanctioned and run by the Chinese government, is the only “union” allowed to operate in China.  It functions as a company “yellow” union.

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