Honda has shut down production in all its four plants in China due to workers from a parts manufacturing unit going on strike. 1,850 workers making transmissions and engine parts at Honda Auto Parts Manufacturing Co in Foshan, Guangdong walked out, demanding for higher pay that’s on par with staff from the main car plants. They want salary to be increased to between 2,000 Yuan ($293) and 2,500 Yuan, from the current 1,500 Yuan.
As a result of this strike, Honda, Japan’s second-biggest carmaker, was forced to close two plants in Guangzhou, Guangdong province and factories in Guangzhou and Wuhan, Hubei province. Honda, representatives from the disgruntled employees and government officials in Foshan are having talks to end the strike, and settle the issue, Honda has said.
The parts factory started operating in 2007 and makes transmissions for the Accord, City, Odyssey and Fit models, according to the company. Honda plans to raise production capacity in China by 28% to 830,000 vehicles a year by the second half of 2012 from 650,000 and introduce two new models as car demand grows in the country. Honda sales in China accounted for 17% of its global sales last year. It’s not known how many vehicles have been affected by this problem.
“China is experiencing a labour shortage that’s shifting the natural bargaining power to workers,” said Chang-Hee Lee, a Beijing-based industrial relations specialist at the International Labour Organization.