Tesla's Top Chinese Rival Rocked By Strike As Workers Protest Income-Cutting Work Schedule: Report

Last week, employees at a BYD Co. BYDDY BYDDF factory in China reportedly went on strike, protesting against changes in their work schedules that would reduce their income.

What Happened: According to CarNewsChina, citing local media, the strike began last week at the BYD factory in Wuxi, Jiangsu province. Employees gathered within the factory compound, with some lying on the ground covered by blue sheets placed by the police.

The main reason for the strike is reportedly the implementation of a four-shift system and a five-day, eight-hour work schedule. This change would eliminate overtime pay, significantly reducing workers’ income.

The Wuxi factory was previously owned by Johnson Controls. Last year, Warren Buffett-backed BYD acquired Johnson Controls’ factories in Chengdu and Wuxi for 15.8 billion yuan ($2.19 billion). Both companies had promised that employee benefits would remain unchanged or slightly improved, but workers claim these commitments were not fulfilled, as per the report.

BYD has not yet responded to the strike, and the reasons for the sudden policy change remain unclear. Reducing overtime is a common strategy to indirectly force employees to resign, avoiding the need for severance pay.

Speculators are questioning if these actions indicate potential layoffs in the Chinese auto industry, with reports of worker layoffs by Li Auto surfacing recently.

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Why It Matters: This strike at the BYD factory comes when the company is making significant strides in the global market. Recently, BYD introduced its new mid-size hybrid-electric pickup truck called the Shark in Mexico, marking a notable expansion outside of China. The Shark, priced significantly lower than Tesla‘s Cybertruck, is currently only available in Mexico. This move highlights BYD’s ambition to capture a larger share of the international market.

Moreover, the strike sheds light on the broader issue of labor practices in China. The controversial “996” work culture, which demands employees work from 9 a.m. to 9 p.m. six days a week, has been a topic of heated debate. Recently, the media relations chief at Baidu, known as China’s Google, resigned after endorsing this demanding work culture.

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