Strike stalls production at Honda's China plants

By YURI KAGEYAMA AP Business Writer

TOKYO (AP) - Honda's four auto assembly plants in China have ground to a halt after workers at a parts maker went on strike demanding better wages.

The strike come after Honda Motor Co.'s announcement earlier this week of an aggressive plan to boost production in China, raising annual production capacity at its Guangqi Honda Automobile Co. joint venture from 360,000 units to 480,000 vehicles by the latter half of 2011. Honda has said that its overall China production capacity will grow to 830,000 vehicles by the latter half of 2012.

Talks were under way at the Honda-owned parts-maker in the southern coastal province of Guangdong, but it was still unclear when production of transmissions and engine parts at the plant can resume, Tokyo-based Honda said Thursday.

Also halted besides Guangqi Honda's two factories, which make the Accord sedan and Odyssey minivan, are two other Honda plants, Dongfeng Honda and Honda Automobile China.

The strike at the parts-maker, which employs 1,900 people, began last week, and has continued off and on into this week, Honda said, while declining to disclose details of the wages or the negotiations.

The newspaper 21st Century Business Herald reported that the workers were pushing to have monthly wages increased from the current 1,500 yuan ($220) to up to 2,500 yuan ($370). A photo showed workers gathered outside the factory in spotless white uniforms and red caps.

Manufacturers in southern China recently have complained of difficulties in finding workers willing to accept the relatively low wages on offer. Authorities generally discourage organized labor protests, but sometimes tolerate them while seeking to mediate a compromise.

Japanese automakers have their eyes on emerging markets like China to maintain growth as the Japanese market has grown saturated.

"Without the gearbox, we cannot move on with installation. Production has been halted since Wednesday and probably will last until Friday," Honda Automobile spokesman Yang Guang told Kyodo News.

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AP Business Writer Elaine Kurtenbach in Shanghai contributed to this story.