Execs enter Honda strike talks

0 CommentsPrint E-mail Shanghai Daily, May 29, 2010
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Honda Motor Corp has sent senior officials from Japan to settle the dispute over wage levels at its striking auto parts plant in China, according to a worker from the plant.

No agreement was reached yesterday and the two sides remained divided on a pay raise, nearly two weeks after the strike started.

The strike forced the Japanese car maker to suspend production at its two assembling plants in Guangzhou, capital of Guangdong Province, on Monday and another two in central China's Wuhan City on Wednesday.

The employee at the Nanhai Honda Auto Parts Manufacturing Company in Foshan, Guangdong Province, told Shanghai Daily via telephone that the talks would continue next Monday and that nearly half of the plant's 1,900 workers might leave the plant if those negotiations broke down.

Employees, who earn about 900 yuan (US$132) a month, have asked for their pay to be raised by 1,000 yuan to 1,500 yuan per month to reach the industrial average in Foshan, where Honda's wholly owned transmission plant is located. Honda has offered a 355-yuan increase but the workers refused it.

The strike is the first to halt Honda's output in China, and it comes after Honda's announcement earlier this week of an aggressive plan to raise annual production capacity by the latter part of 2011.

Honda said in a statement yesterday that it hopes to reach agreement with employees as soon as possible. It said talks have been going on with mediation assistance from Foshan government officials.

"But there is no timetable for the resumption of production yet," said spokesman Zhu Linjie from Honda Motor (China) Investment Co.

About 1,000 workers at the parts plant rallied on Thursday afternoon, demanding improved working conditions and increased pay.

The plant supplies 480,000 sets of transmissions a year to Honda's China ventures with Guangzhou Automobile and Dongfeng Motor Group.

Guangqi Honda, which produces Accord, Fit and Odyssey models in Guangzhou, has an annual capacity of 360,000 units. Dongfeng Honda in Wuhan rolls out 200,000 vehicles.

The auto parts factory has lost an estimated 300 million yuan from the strike, according to media reports. The overall cost for Honda could be more because of the suspended production.

Guangqi Honda said late Thursday that production was halted for lack of spare parts. The company said it would speed up the output to make up for any lags whenever production resumed.

"Sales and services at dealer networks have not been impacted because of the stock pile-up," the statement said.

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