Honda says factory in China back to work after strike that idled vehicle production

Honda says China factory back to work after strike

BEIJING — Honda Motor Co. said a key parts factory in China resumed full operation Wednesday following a two-week strike over wages that forced Honda to halt production at four assembly plants.

The strike highlighted tensions between workers and foreign companies that look to China as a source of cheap labor and a fast-growing market amid weak demand elsewhere.

Work resumed after employees of the factory belonging to Honda’s joint venture, Guangqi Honda Automobile Co., accepted Honda’s pay increase offer. The plant in the southern city of Foshan, near Hong Kong, makes transmissions and engine parts.

“Our factory in Foshan is back to normal production,” said a Honda spokeswoman who would give only her surname, He. “Every worker is back to their normal production line.”

A company statement said Honda’s four assembly plants elsewhere in China would remain idle until at least Thursday and no date was set for production to resume.

Companies in China are finding it harder to attract and keep workers, who are demanding better pay and working conditions.

The communist government prohibits independent labor unions but has permitted protests in recent years over labor grievances. Protests are common in the Yangtze River Delta near Shanghai, though rarely reported in the state controlled media.

A man who answered the phone at the Foshan office of the factory’s government-affiliated union referred questions to the city government propaganda office. Phone calls there were not answered.

Honda said Monday that the factory’s employees agreed to a pay raise of 366 yuan ($53.60) per month for each full-time worker. That would increase pay for a new employee to 1,910 yuan ($280) per month.

Some workers held out for more and the factory union said about 30 people fought with union officials Monday, leaving some people hospitalized. Honda said some production at resumed Monday but was halted Tuesday.

The factory in Guangdong province, which abuts Hong Kong, employs 1,900 people.

The strike came at an awkward time for Honda, which announced plans last month to expand production capacity in China to nearly one-third by 2012 to meet surging demand in the world’s biggest auto market.

Strong sales in China helped Honda jump from a loss to a 72 billion yen ($774 million) profit for the January-March quarter.

Output was suspended at two Guangqi Honda factories that make Accord sedans and Odyssey minivans and at Honda Automobile China, which makes Jazz hatchbacks, all in Guangzhou near Foshan. Dongfeng Honda in the central province of Hubei suspended output of Civic sedans and CRV SUVs.

The strike and an outcry over a string of suicides at Foxxconn Technology — a Taiwanese-owned contract manufacturer for Apple, Sony and other major 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.

The official Xinhua News Agency said Tuesday the strike was a reminder of social strains brought on by China’s status as “the world’s factory.” It said “social harmony” might be threatened if workers are not paid reasonably.

The commentary later appeared to have been deleted from the Internet, possibly to avoid inflaming public sentiment while Premier Wen Jiabao was in the midst of an official visit to Japan.

Associated Press researcher Bonnie Cao and AP Business Writer Elaine Kurtenbach contributed to this report.