Honda might again halt production in China

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Workers at a south China factory supplying locks and key sets to Honda Motor Co. vehicles continued to strike over pay on Friday, a move that might force Japan's No. 2 carmaker to halt its assembly lines in China for a third time.

Workers at Honda Lock (Guangdong) Co., Ltd., located in Zhongshan City in China's manufacturing hub of Guangdong, told Xinhua that negotiations with the management are deadlocked as the company's offer does not meet workers' pay demands.

A spokesman with Honda Motor (China) Investment Co., Ltd., parent of the lock-manufacturing joint venture, said the current inventory of locks can last only until Saturday (June 12) and the company has yet to set production plans for any time after June 13.

The coming Saturday and Sunday are workdays in China and a three-day holiday for the Dragon Boat Festival begins next Monday.

Honda was forced to halt its assembly lines in Guangdong twice in less than a month due to a weeks-long strike at a parts supplier and another at a factory supplying mufflers and exhaust systems. Workers at both factories demanded, and finally received, a significant pay rise.

It did not halt the assembly lines, however, for the strike at the locks and key sets factory starting June 9 as company sources earlier said the inventory had not run out.

But that might change.

The lock factory on Thursday agreed to raise each of its 1,400 employees' monthly salary by 100 yuan (14.6 U.S. dollars) and to raise the standard of over-time pay to 50 yuan (7.3 U.S. dollars) per day. But workers refused to sign a company-prepared commitment to end the strike.

On Friday, workers held a rally in front of the factory and refused to return to their workplace.

A striking worker who declined to be named told Xinhua that workers demanded the same pay rise as striking workers at Nanhai Honda Auto Parts Manufacturing Company received -- about 500 yuan (73 U.S. dollars) per month.

"All work for Honda but how come workers at Nanhai get higher pay and we don't?" asked another worker, who also refused to be named for fear of retribution. "The pay is too low. We can not save anything at the end of the month."

Honda, which began manufacturing motorcycles with its Chinese partners in 1982, now has 15 joint-ventures and subsidiaries in China, employing 24,000 workers. It sold 470,000 units of cars in China in 2008 while vehicles manufactured here are shipped to Japan, Europe and other overseas destinations, the company said on its Chinese-language website.

Labor unrest rattled China's factories one after another in recent weeks, prompting companies and analysts to doubt how long the era of inexpensive and docile China labor can last.

In the most dramatic case, ten workers at the IT components supplier Foxconn's factories in China jumped to their deaths this year.

That trend, however, seems to have ended after Foxconn announced a significant pay hike and took steps to enrich the extra-curricular activities and social life of its dormitory-staying employees.

Compared to their parents, the new generation of Chinese workers - mostly born in late 1980s and 1990s - are relatively intolerant of low pay and harsh working conditions, observers said. Rather, they have more interest in enjoying life and not working like robots, notes observers.

While that might raise the production cost for foreign companies which base their factories in China, observers say workers with more money to spend is good news to companies that target Chinese consumers and can help China balance its growth from over-dependence on exports and investment.

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