Honda Factory Crippled by Workers’ Strike in China

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|Video Courtesy of NTDTV |

Japan’s second-largest vehicle manufacturer, Honda Motor Co. Ltd, announced that two of its auto factories in China remained closed on June 10.

Plants in Guangzhou, Guangdong Province, will be shut down, the second day in a row after workers from a parts supplier walked off the job after failing to secure higher pay, Natsuno Asanuma, a spokeswoman at Honda in Tokyo, said yesterday. Another supplier in Guangdong stopped production yesterday because of a strike, said Gao Xia, a Honda spokeswoman in Beijing, according to a Bloomberg report.

The most recent labor woes for Honda were instigated in the Pearl River Delta factory town of Zhongshan, where workers at a unit of Honda Lock circled parts of the factory perimeter fence. The staff of the factory voiced their demands for higher wages while local police surveillance prevented journalist access by blockading surrounding roads.

However, several workers interviewed by Reuters made it clear that they were dissatisfied with wages and insisted on an annual wage hike of more than 15 percent, as well as better benefits, increased freedom to organize independent labor unions, and commitment from management to provide job security.

“We’re definitely going to strike tomorrow (Friday),” said one of the workers streaming out of the gates in the late afternoon in a Reuters report. “Our wages are too low.”

Negotiations at Foshan Fengfu are continuing, said Kazuhito Anma, a spokesman for Yutaka Giken Co., which owns 65 percent of the venture with Taiwan’s Full Wei Industrial Co. The factory employs about 440 workers and produces exhaust parts for Honda Accord, Fit, and Odyssey models.

Honda, which sold 17 percent of its cars in China last year, has been riddled with strike action resulting in factory production grinding to a halt several times since May 24. Foshan Fenfu, sparked the first instance of industrial action at a wholly-owned transmissions maker in the city of Foshan, part of China’s Pearl River Delta, which is the source of around a third of the country’s exports. Employees of Foshan Fengfu Autoparts Co. started strike action from June 7 after Honda raised wages 24 percent with a different parts maker to appease other workers who were threatening to shut down its operations at its four Chinese car-assembly factories. This situation is following a similar pattern to another southern China outburst, whereby Foxconn Technology Group received worldwide attention with its documented suicides, poor working conditions, and pay controversy. Latest reports suggest that the factory workers with the lowest pay may have their wages doubled.

Japan’s third-biggest carmaker, Nissan, is injecting 5 billion yuan (US$732 million) to develop a plant in Guangzhou and aims to produce up to 600,000 vehicles per year at the plant by 2012.The current output is 430,000, the company said in April.

“We are telling our suppliers in China to speak to the labor unions so that we have a smooth operation there,” Nissan’s Chief Operating Officer Toshiyuki Shiga said yesterday in Yokohama, where the company is based.

Overall the region is facing instability and factories and businesses are struggling for survival.

“It is very difficult for us,” said Danny Lau, chairman of the Hong Kong Small and Medium Enterprises Association. He said some 2,000 to 3,000 of an estimated 50,000 Hong Kong-owned factories in southern China’s Pearl River Delta, an export hub, might close.

Whether or not work conditions are improving remains to be seen, but an alarming trend of industrial action in China has been occurring.