Honda says Chinese labor dispute has been settled

DETROIT — Honda Motor Co. said a labor dispute at a parts plant that crippled the automaker's production in China was resolved on Friday.

The pay dispute at an engine and transmission factory touched off a two-week strike and forced Honda to shut down four Chinese assembly plants for lack of parts.

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, Calif., 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.

The strike 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.

Employees of 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.

The assembly plants will run Saturday, usually a day off, to make up part of the lost production, the company has said.

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."