Honda reaches pact with China parts plant workers

Honda Motor said on Friday it settled a labor dispute at a Chinese car parts plant after almost three weeks of disruption, allowing it to build cars again in the world's fastest-growing market.

Workers at the transmissions factory in Foshan, south China, met managers on Friday after putting a strike on hold to see whether the company would give in to additional concessions such as an annual salary increase of at least 15 percent.

The workers threatened to go back on strike if management rejected their demands.

"We've reached a conclusion, and production at the parts plant and car factories will go back to normal," Honda spokeswoman Akemi Ando said.

Japan's No.2 automaker said the last remaining holdouts at the 1,900-strong parts factory agreed to the company's original offer of a 366 yuan ($53.60) hike in monthly starting salary for regular workers, and "other concessions" after compromises made on both sides.

It did not disclose the nature of the other concessions.

A union representative said that Honda had agreed to provide an additional 134 yuan per month for workers, with five months of the extra amount payable as a single sum on Oct 1.

The settlement allows Honda to go back to building the Accord, Civic and other popular cars at its four assembly plants in China, whose market accounted for 17 percent of its global car sales last year.

Honda restarted assembly at all four plants on Friday as the supply of transmissions flowed for the first time in more than a week.

Honda said it expected to recoup the thousands of units of production losses through additional shifts in future.

HIGHER WAGES, MINIMUM BONUSES

The unusually long strike at Honda's supplier came at a time when foreign companies in China have been hit with a string of worker disputes, raising questions about how long China can remain the world's center of cheap manufacturing.