Honda Motor Co. (HMC) has revealed that it has settled a labor dispute with is workers in China, which had triggered a two-week strike in the company’s four assembly plants in the country. Honda had shut down all four of its facilities at the end of May after 1,850 workers at a parts unit went on strike demanding a pay raise.
Honda has three assembly plants in Foshan, Guangdong — near Hong Kong — which makes Accord sedans, Odyssey minivans and Jazz hatchbacks. The fourth plant is located in the central province of Hubei, which makes Civic sedans and CRV sport utility vehicles.
Employees at the factory in Guangzhou agreed to a pay raise of RMB366 ($53.60) per month for each full-time worker. However, some employees were demanding a higher pay hike of RMB800 ($117) per month.
Honda has revealed that workers have agreed to a new offer and it expects no further work disruptions. However, it has not disclosed any details about the agreement with the workers, who opposed the announced pay hike.
The assembly plants resumed production last Saturday — usually a day off — to make up for the lost production during the two-week strike.
The labor dispute has set Honda back with respect to its plans to expand production in China.
Honda’s sales in China accounted for 17% of its global sales in 2009. Honda will increase sales in the country by 9% this year to 630,000 vehicles. Further, it plans to lift production capacity in the country by 28% to 830,000 vehicles a year by the second half of 2012. It will also introduce two new models in the country to meet the growing demand for cars in China.
Read the full analyst report on “HMC”
Zacks Investment Research
