Honda to raise wages for striking workers at China plant

Honda Motor Co., Japan’s second- biggest automaker, will raise wages at a parts factory in China after a strike at the plant shut down its local car production.

Workers will receive a 24 percent pay increase to 1,910 yuan ($280 dollars) a month, the Tokyo-based company said in a faxed statement late yesterday. Most of the employees have accepted the offer and talks continue with the rest, Honda said.

Production at all four Honda car factories in the country remains suspended and the carmaker aims to make plans today for returning to normal operations, it said in a separate statement. Output of manual transmissions at the parts plant resumed yesterday.

"My guess is that it will take less than a week to get production back at full capacity once the strike is resolved," Tianshu Xin, managing director at IHS Global Insight in Shanghai, said before the company announcement. Honda will likely add shifts to make up the lost production, he said.

Honda fell 0.8 percent to 2,749 yen as of 9 a.m. in Tokyo trading, while the benchmark Nikkei 225 Stock Average dropped 0.9 percent.

The maker of Accord and Civic cars shut down China production last week after workers at the parts unit walked out, demanding a pay raise. The strike, the first to stop Honda’s production in the country, may be reducing its output by as many as 3,000 vehicles daily, analysts said.

The workers demanded monthly pay be boosted to between 2,000 yuan and 2,500 yuan, Honda said on May 27. Workers and union officials clashed at the factory yesterday after some striking employees refused to sign a document saying they would end the walkout, the South China Morning Post reported, citing workers.

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The automaker shut two plants in Guangzhou, Guangdong province, on May 24 and factories in Guangzhou and Wuhan, Hubei province, on May 26 after 1,850 workers making transmissions and engine parts at Honda Auto Parts Manufacturing Co. in Foshan, Guangdong, went on strike May 17.