Honda agrees 24% pay hike for China striking workers

Japanese automobile company Honda has decided to increase salaries of its striking workers in China by 24 percent, ending the strike that halted production of its auto parts for over a week.

A spokeswoman of Honda, headquartered in Tokyo, said on Tuesday the company will give 366 yuan ($53.80) raise to its workers at Honda Auto Parts Manufacturing Co, located in the southern city of Foshan. Now the average salary of workers will be 1,910 yuan per month, including allowances, she said.

"As a result, operations resumed at part of the production lines for auto parts...we will decide whether we can resume operations at our main assembly lines starting from June 3."

The workers were demanding at least 500 yuan ($74) hike in their salaries. In case the workers continue their strike, the company said it will seek help from local authorities to mediate.
 
Honda suffered huge loss of production due to the strike at its auto parts factory while its assembly joint ventures, Guangqi Honda Automobile and Dongfeng Honda Automobile, too remained closed with no supply of auto parts.

The minimum wage in Foshan city is 920 yuan (USD 135) per month and the company's average salary is 1,000 yuan. Citing rising consumer prices, the workers went on strike last week demanding higher salaries.

Honda, which follows just-in-time (kanban) practice for its inventory, suffered as the main auto parts factory was shut down due to the strike, forcing other units too to close down.

Honda's Chinese sales rose 31 percent in April year-on-year to 55,113 units and its annual sales were at 576,223 vehicles in China last year, 23 percent more than the previous year.