May 28, 2010
A 10-day-old strike at a key Honda component factory outside Guangzhou has forced Japan's No 2 carmaker to suspend production in China, the world's largest and fastest-growing car market.
Work at Honda's four car plants on the mainland - with capacity to churn out 1,800 vehicles per day - ground to a halt this week after assembly line workers at its wholly-owned Honda Auto Parts Manufacturing Co walked off the job on May 17 to push for higher wages, a Honda spokeswoman said yesterday.
Honda Auto Parts is based in Foshan's industrial Nanhai district and employs around 1,900 staff making components for the transmissions and engines used in Accord sedans, Civic hatchbacks and other models the Japanese firm manufactures at its joint ventures with Guangzhou Automobile Group Co (GAC) and Wuhan-based Dongfeng Motor.
"Apart from section heads and upper management, most of the other workers participated in the strike," spokeswoman He Xiaowen said. "Production line workers across all posts have walked off the job."
Striking staff at the plant are demanding monthly pay be raised to between 2,000 yuan (HK$2,280) and 2,500 yuan per month - levels comparable to those at Honda's car-making plants - up from 1,500 yuan now, according to mainland reports.
"As a component factory, they can hold the entire industry to ransom when the parts are not there," Anita Chan, a mainland labour relations expert at Australian National University's Contemporary China Centre, said. "Auto factories now are all using 'just-in-time' production, which means there is almost no inventory."
Guangqi Honda Automobile, a joint venture with GAC that is currently 50 per cent owned by
"Honda officials have presented the local government with an official report. The government ... is in the process of helping to co-ordinate things," the spokeswoman said.
The stoppage comes at an embarrassing time for China's fifth-best-selling car brand. The mainland is the firm's third biggest production base after Japan and the US, and Honda this week announced plans to spend 930 million yuan boosting annual capacity at its Chinese factories to 830,000 cars by the end of 2012, up 28 per cent from 650,000 at present.
Independent trade unions are banned in China and collective bargaining is rare. The Communist Party-controlled All-China Federation of Trade Unions is the only official union and historically has been more closely aligned with management than workers.
"What we are seeing increasingly is grass-roots action where workers strike and force management to negotiate directly with them," China Labour Bulletin communications director Geoffrey Crothall said.