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Labour unrest continues at Honda


Honda Motor Co looked set to resume building cars in China on Friday after a supplier of exhaust systems contained a labour dispute, but workers at another parts maker remained on strike.

Japan's No.2 automaker and iPhone maker Foxconn International Holdings have been the most prominent companies hit by a lengthening string of labour disputes in China between workers resentful of large income disparities and employers trying to cap rising costs.


Strikes are usually stamped out quickly in China over government concerns about social unrest. But more disputes have been erupting lately, as workers in the world's manufacturing hub are emboldened by the concessions made by the likes of Foxconn, owned by Taiwan's Hon Hai Precision Industry Co.

Honda, which sold 17 percent of its cars in China last year, has idled its four local factories on and off since May 24, since a first strike at a wholly owned transmissions maker in the southern city of Foshan.

A second strike, at a maker of exhaust pipes and other parts, also in Foshan, ended late on Wednesday, and the plant's Japanese parent said that with production back to normal, shipments to Honda's suspended factories should return to normal on Friday.

Honda spokesman Yoshiyuki Kuroda said the carmaker hoped to announce a restart from Friday once a final decision was made. Honda had halted production at two assembly plants, which build the Accord, Fit, Odyssey and City, on Wednesday and Thursday.

But the settlement of the two earlier strikes was overshadowed by a third one, at a factory in Guangdong province run by unit Honda Lock, where about 85 percent of the 1,400 workers entered a second day of strike on Thursday.

A Honda Lock official in Japan said shipments would be unaffected for at least a day or two, with enough locks in stock. But he added that negotiations were ongoing, and a prolonged dispute could disrupt the flow of supply to Honda's car plants.

"We're still gathering information, and we don't know when the negotiations will end," Honda Lock's Hirotoshi Sato said.


It was also uncertain whether workers and management at the Foshan exhaust systems factory were on the same page, with one employee saying negotiations would continue.

"We still have to discuss many conditions," the worker told Reuters by telephone, declining to be identified.

"They've only agreed to a small number of terms including a very small pay rise that's far less than what we wanted." He said that workers were returning nevertheless because they were seeking a peaceful settlement.

"For us, we're doing all this simply because our wages are too low. But our strike seems to have caused a negative impact on society and trouble for local officials. We don't want this ... so some of us have decided to go back to work," he said.

Some executives conceded that demands for higher pay were inevitable as China's economy booms.

"We had far worse labour strife in Japan when our economy was booming decades ago," Mitsubishi Motors Corp President Osamu Masuko told Reuters this week.

"It's natural for China to go through this phase as its economy expands. Even so, you don't see anyone pulling out of China -- that's not an option because of the market's growth."

Honda shares ended morning trade down 0.8 percent, while the Nikkei average gained 0.3 percent.