Honda’s China Plants May Stay Closed as Workers Continue Strike

[Omaha Steve]

http://www.businessweek.com/news/2010-05-30/honda-s-china-plants-may-stay-closed-as-workers-continue-strike.html

May 30, 2010, 11:02 AM EDT

By Shelley Smith and Jun Luo

May 31 (Bloomberg) -- Honda Motor Co. plants in China may remain closed today as a union leader said yesterday striking workers at a component manufacturer won’t return to work soon.

Employees at Honda Auto Parts Manufacturing Co. in Foshan, Guangdong province, probably won’t reach agreement with the Japanese carmaker anytime soon, Wu Youhe, union chairman at the company, said by phone yesterday.

The strike is a sign that automakers can expect rising labor costs in China, Yasuhiro Matsumoto, an analyst at Shinsei Securities Co. in Tokyo, said last week. Trade unions and employers appear to be reporting a growing number of work stoppages in China, although there are no official numbers, according to the International Labor Organization in Beijing.

“China is quickly turning into a developed market from an emerging market, and labor costs will rise fast,” Matsumoto said. Carmakers “have no choice but to accept cost and wage increases if they are to continue business in the market.”

Honda closed four China plants last week after 1,850 workers at the parts factory went on strike. They are demanding monthly pay be boosted to between 2,000 yuan ($293) and 2,500 yuan, from 1,500 yuan, Yasuko Matsuura, a Tokyo-based Honda spokeswoman, said on May 27.

FULL story at link.