Japanese automaker Honda said yesterday it had offered a 24 percent pay raise to workers in China to end a strike that has cast the spotlight on mounting labor unrest in the world’s No. 3 economy.
The problems faced by Japan’s No. 2 car maker come after a spate of suicides at a plant owned by Taiwan’s Foxconn (富士康), which assembles Apple’s iPhone and other gadgets, and a brief strike at a parts supplier for Beijing Hyundai.
The incidents have raised questions about working conditions for the millions of employees in China’s factories and sparked calls for better oversight from the corporate heavyweights who benefit from Chinese labor.
Honda is ready to give a 366 yuan (US$53.80) monthly raise to workers at Honda Auto Parts Manufacturing Co, in southern Foshan city, taking monthly salaries including allowances to 1,910 yuan, officials in Tokyo said.
“As a result, operations resumed at part of the production lines for auto parts,” Honda spokeswoman Akemi Ando said. “Today, we will decide on whether we can resume operations at our main assembly lines starting on June 3.”
“Employees there are largely accepting our offer, while we will continue negotiations with those who are not satisfied with it by asking Chinese local authorities to play a mediator role,” she added.
Production partially resumed on Monday at the parts factory, but Honda’s Chinese assembly joint ventures, Guangqi Honda Automobile and Dongfeng Honda Automobile, remained closed due to the lack of key components, Honda said.
Honda has a production capacity of 650,000 vehicles per year in China. The Foshan auto parts unit in southern Guangdong province — China’s main factory belt — makes transmission and engine parts.
About 200 people, apparently trade union officials, scuffled with workers who refused to end the strike on Monday and forced them from the factory, but no one was seriously hurt, said Xia Houquan, a striker.
“They said they would sack anyone who refused to come back to work and that’s how the others were forced to return ... If they fire me, maybe I’ll have to find another job,” Xia said.
District government officials sent union officials to the plant to ensure production resumed, the official Xinhua news agency reported, citing unnamed government sources.
Xinhua reported about 40 workers tried to prevent colleagues from resuming work but were confronted by dozens of people carrying cards identifying them as union officials at a factory gate on Monday.
“We are not satisfied. We were demanding [an increase of] 800 yuan,” said Xia, 23, who worked in the transmission assembly department. “Living costs are so expensive here. I can hardly save any money and sometimes have to borrow.”
Production at the four factories operated by Honda’s two joint ventures stopped about a week ago.
Honda sold 576,223 vehicles in China last year, up 23 percent year on year. Its Chinese sales rose 31 percent year on year in April to 55,113 units.
Labor issues in China have come to the forefront in recent weeks after the suicides at Foxconn, which also counts Dell and Sony among its clients.
In an apparent effort to confront a tide of bad publicity, Foxconn announced a 20 percent wage raise at its China plants.
Elsewhere, around 1,000 workers at an auto parts supplier of Beijing Hyundai, a joint venture of the South Korean car maker, went on strike last week but returned to work after management promised raises, state media said.
According to the All-China Federation of Trade Unions, nearly a quarter of Chinese employees have not had a raise in five years, Xinhua said.
“The price of labor in China has indeed been twisted and much undervalued,” Chang Xiuze (常修澤), a researcher at China’s top economic planning agency, the National Development and Reform Commission, told the agency.
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