Honda stalled as China workers mull wage increase

Chinese production of Honda automobiles remains stalled as the result of a strike by workers looking for a larger wage increase.

By , Associated Press

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    In this photo taken on May 26, employees at a Honda supply plant in Foshan gather near the factory gate during a strike in south China's Guangdong province.
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Honda's car assembly factories in China remained stalled by a strike Tuesday as some workers held out for a wage increase bigger than the 24 percent the automaker is promising.

A labor union official said his group was still trying to convince workers holding out for twice the nearly 400 yuan ($150) increase Honda has offered to return to work at Honda Auto Parts Manufacturing Co. in the southeastern coastal city of Foshan.

"Some are still struggling to get more. As the district labor union we hope the mess will end as soon as possible," said an official with the Nanhai labor union in Foshan, who gave only his surname, Li.

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Li confirmed reports that workers had clashed Monday with labor union officials and that some were hospitalized afterward.

"About 30 workers got very emotional, and we had an angry dispute," he said.

The strike at the Honda parts factory caused a lack of transmissions and engine parts that forced Honda to shut production at its four assembly plants in China last week.

The stoppages come at an awkward time for Honda, which just last week announced it would add capacity to meet surging demand in what has become the world's biggest auto market.

Honda, Japan's No. 2 automaker, jumped from a loss to a 72 billion yen ($774 million) profit for the January-March quarter, helped by booming demand in China and India. The company is facing added pressures to keep costs under control at a time of intense price competition with Toyota Motor Corp. and other rivals.

Honda is aiming to raise annual production capacity by nearly a third to 830,000 units by 2012.

But it will be grappling with an increasingly restive work force as it does so.

The Honda strike and an outcry over a string of suicides at Foxxconn Technology — a major contract manufacturer to Apple, Sony and other big name brands — appears to have resonated among many Chinese.

"Honda's workers went on strike as the only effective way to negotiate with the company for better treatment. It seems to be their last resort," said Chang Kai, a labor expert at Beijing's Renmin University.

A commentary by the official Xinhua News Agency remarked that the strike was a "timely reminder of the social strains brought about by being the 'world's factory.'

"A reasonable salary and a fair chance to enjoy the fruits of one's work should be part of the promised decent life and greater dignity, lest the wealth gap grow wider and social harmony is threatened," said the article.

The commentary later appeared to have been deleted from the Internet. With Premier Wen Jiabao in the midst of a state visit to Japan, authorities likely would prefer to keep the issue low key, given the history of sometimes violent public protests against the Japanese in China.

"Almost all" the striking workers had agreed to increasing the total starting wage by about 24 percent to 1,910 yuan ($280) per month as of Monday, said Honda spokeswoman Yasuko Matsuura.

Some production at the parts factory restarted Monday, but it was again stopped on Tuesday, according to a Honda press release issued Tuesday night in Tokyo.

Factories that depend on the parts plant would remain closed through Thursday, with the schedule after that still undecided, the release said.

China outlaws unauthorized labor organizing, limiting such activities to the government-affiliated All China Federation of Trade Unions, to which Li's union is affiliated, and to company branches of the ruling Communist Party.

But in recent years authorities increasingly appear to be tolerating sporadic, peaceful protests by aggrieved workers. In the Yangtze River Delta region, near Shanghai, sit-ins and other protests are common, though rarely reported in the state controlled media.

Global manufacturers that rely on low-wage Chinese workers to keep costs down are struggling to attract and keep young workers who are proving less willing than earlier generations to put up with miserable working environments and poor wages.

The strike has affected two factories at the Guangqi Honda Automobile Co. joint venture in the southern city of Guangzhou, which make the Accord sedan and Odyssey minivan. Dongfeng Honda in central Hubei province, which produces the Civic and CRV SUV, also suspended output.

Guangzhou-based Honda Automobile China, which has a daily capacity of 120 Jazz models, was expected to partially resume operations and produce about 50 vehicles on Monday.

Honda's parts factory, located in Guangdong province, employs 1,900 people.

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Associated Press Writer Jay Alabaster in Tokyo and researcher Ji Chen in Shanghai contributed to this report.

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