May 31, 2010 / 3:50 AM / 8 years ago

UPDATE 3-Strike-hit Honda sees some progress on China output

* Honda announces 24 pct wage hike at China parts plant

* Says most striking workers have agreed terms

* Parts plant resumes partial production

* Some workers still dissatisfied with revised offer

* 4 Honda car plants to close at least through Tuesday

(Adds wage hike offer, other details)

FOSHAN, CHINA/TOKYO, May 31 (Reuters) - Workers at a strike-bound Honda Motor (7267.T) parts factory in southern China pressed on with a drive to win higher wages on Monday while the carmaker lured back many to partly resume production.

Japan’s No.2 automaker said most of the workers who had downed tools had accepted a company offer to raise starting salaries by 24 percent, but talks with hold-outs continued, keeping its four car factories idle at least through Tuesday.

Honda has been unable to build cars in China since last week after workers at the transmissions plant stopped working on May 17, causing thousands of units in lost sales in the world’s biggest auto market.

China, the world’s fastest-growing major economy, has been hit with a string of labour disputes at foreign companies, whose migrant workers have begun to demand better pay and conditions.

However the duration of the strike at the Honda parts factory is unusual in China, where foreign investors have come to count on a low-cost and disciplined labour force.

The Communist Party-backed All China Federation of Labour Unions discourages independent worker activism and generally sides with management.

Honda said many employees had returned to work at the transmissions plant in Foshan, Guangdong province, and assembly had restarted in late afternoon on Monday.

A factory exporting Jazz subcompacts might also be able to resume on Wednesday, Honda spokesman Hideto Maehara said.

Honda declined to disclose how many of the 1,900 salaried workers at the parts factory had gone on strike but said the majority had agreed to return after the company offered to lift the starting salary of 1,544 yuan ($226) a month by 366 yuan.


The original salary was already far above the legal minimum wage of 920 yuan, the parts maker said in a statement.

“We are currently trying to convince those who continue to object to the offer ... to return to full operation as soon as possible,” the company said.

The factory also employs an undisclosed number of vocational school interns, who earn less than full-time workers.

A few dozen strikers at the plant said earlier up to 80 workers had been fired for refusing a pay increase they said amounted to 11 yuan a month. Honda could not confirm the dismissals.

“It’s a matter of dignity,” said one young worker who declined to give his name. “What they’re offering us is not enough to live on.”

About 30 workers told reporters at the factory gates they were unhappy with how official trade unions were representing them. Some said they had been roughed up by union officials, displaying scratches underneath their shirts.

About 100 representatives of the official union confronted the workers at the gates, attempting to push them out of the factory grounds as police and reporters watched.

Honda, which lags Toyota Motor (7203.T) and Nissan Motor (7201.T) in China, has joint ventures with Dongfeng Motor Group Co (0489.HK) and Guangzhou Automobile. It also has a small plant making its Jazz model for export.

It said the two plants held with Guangzhou Auto would be closed at least until Tuesday, while Dongfeng Honda’s factory would remain closed until Wednesday. Including the export plant, Honda has the capacity to build 650,000 cars a year in China.

Some other foreign companies have begun to address workers’ discontent over pay and working conditions. Taiwan’s Hon Hai Precision Industry Co Ltd (2317.TW) for instance plans to raise salaries by about a fifth at its Foxconn International (2038.HK) unit, maker of Apple Inc’s (AAPL.O) iPhone, as it struggles to stop a spate of suicides and quell public anger. [ID:nTOE64R02R]

Honda shares ended down 0.3 percent at 2,770 yen, in line with Tokyo’s transport sector subindex .ITEQP.T. (Reporting by Chang-Ran Kim in TOKYO, Fang Yan in SHANGHAI, Gary Ling in FOSHAN, Alison Leung in HONG KONG and Kim Yeon-hee in SEOUL; Editing by Ron Popeski and David Holmes) ($1=6.830 Yuan)

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