CHENGDU, China -- China continues to experience labor problems at foreign firms.
The latest is Japan's Honda Motor Co., which last week suspended production at all four of its plants in China, according to reports. This is due to a strike at a Honda transmission factory in Foshan, Guangdong, which employs some 1,850 workers, according to reports.
The strike hit May 17. Workers at the plant want salary increases, according to reports. Workers earn 900-to-1,500 yuan ($130-to-$220) a month, according to FT.com. They are asking for 2,000-to-2,500 yuan a month, the report said.
The strike could impact Honda's expansion efforts in China. In March, Guangqi Honda Automobile Co. Ltd., a Honda automobile production joint venture in China, set plans to expand its annual production capacity from the current 360,000 units to 480,000 units to meet booming demand in China.
The total investment for this expansion is expected to be approximately 930 million RMB ($136.1 million). Guangqi Honda's total employment is expected to be increased from the current 6,800 to 8,000 ''associates,'' according to Honda.
Guangqi Honda began production in 1999 with the Accord. It began making the Odyssey in 2002, Fit in 2004 and City in 2006. In addition, the Crosstour will be added to the lineup before the end of 2010, and sales of the LI NIAN brand vehicle, Guangqi Honda's proprietary automobile brand, is scheduled to begin in 2011.
Combining Guangqi Honda's capacity expansion and the addition of Dongfeng Honda's second plant, scheduled to begin operations in the latter half of 2012 with annual production capacity of 60,000 units, Honda's overall annual automobile production capacity in China will be expanded from the current 650,000 units to 830,000 units by the latter half of 2012, according to the car maker.
There are other labor issues in China. Hon Hai Precision Industry Co. Ltd., which trades as Foxconn and makes electronic products for high-profile brands such as Apple and Sony, is planning to raise the wages of its Chinese workers by about 20 percent, according to a Financial Times report.
The proposed pay rise comes after a series of suicides at Foxconn's enormous Longhua campus in Shenzhen, southern China, has called into question working practices there and brought the company under international scrutiny.