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Honda says Chinese labor dispute has been settled

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[June 05, 2010]  BEIJING (AP) -- Honda Motor Co. said a labor dispute at a parts plant that crippled the automaker's production in China has been resolved after a wage increase of 24 percent, and the affected assembly plants would be running again Saturday.

InsuranceThe two-week strike at an engine and transmission factory forced Honda to shut down four Chinese assembly plants for lack of parts. It highlighted tensions between workers and foreign companies that look to China as a source of cheap labor and a fast-growing market amid weak demand elsewhere.

"Poor communication led to a great deal of discontent and eventually developed into a labor dispute. Our company will reflect deeply on this and strengthen communication with employees and build mutual trust," Beijing-based Honda Motor (China) Investment Co. Ltd. said in a statement.

"All the factories are back to normal," said Yasuko Matsuura, a spokeswoman for Honda in Tokyo.

She said the two sides agreed to a 24 percent increase in wages, but would not talk about other aspects of the deal.

Calls to the plants rang unanswered Saturday.

Earlier in the week, employees at the parts plant agreed to return to work on Friday after a deal was reached, but some were dissatisfied and threatened to walk out again to press for more money.

Honda spokesman David Iida at the company's office in Torrance, California, said Friday that all workers have agreed to a new offer and the company expects no further work disruptions.

"Now everyone's on board and everyone's working," he said.

Employees at the factory in Foshan, near Hong Kong, agreed to a pay raise of 366 yuan ($53.60) per month for each full-time worker, which would increase the monthly pay for a new employee to 1,910 yuan ($280).

Some employees still were demanding an 800 yuan ($117) raise, though all agreed to go back to work.

Iida said he had no information on what was done to reach agreement with workers who were unhappy with the raise.

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Three of the assembly plants are in Guangzhou, near Foshan, and make Accord sedans, Odyssey minivans and Jazz hatchbacks. The fourth in the central province of Hubei makes Civic sedans and CRV sport utility vehicles.

The strike came at an awkward time for Honda, which announced plans last month to expand production capacity in China by nearly one-third by 2012 to meet surging demand in the world's biggest auto market.

Strong sales in China helped Honda jump from a loss to a 72 billion yen ($774 million) profit for the January-March quarter.

Companies in China are finding it harder to attract and keep workers, who are demanding better pay and working conditions.

On Wednesday, Taiwan's Foxconn Technology Group announced it was raising pay by 30 percent for factory employees in China after a spate of suicides that activists blamed on stressful conditions and overwork. Foxconn makes iPhones and other products under contract.


A Foxconn official said the company hopes the raises lead to a "happier work environment."


Associated Press writers Tom Krisher in Detroit and Malcolm Foster in Tokyo and researchers Bonnie Cao and Henry Hou in Beijing contributed to this report.

[Associated Press; By CARA ANNA]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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