The Associated Press July 22, 2010, 6:47AM ET

Honda strike in China ends with pay hike

Striking workers at a factory in China that supplies Honda Motor Co. went back to work Thursday after agreeing to a 47 percent pay hike, an employee said.

The strike at the Atsumitec Co. factory in the southern city of Foshan in Guangdong province near Hong Kong came amid a wave of wage protests that have idled dozens of Chinese and foreign-owned factories.

Atsumitec's 200 employees went back to work Thursday afternoon after accepting a 500 yuan ($74) increase in monthly salaries that start at 1,070 yuan ($158), the employee said by phone from the factory office. He refused to give his name.

The strike began July 12 at the factory, which supplies gearshift levels to Honda assembly plants in China. Honda said earlier its production was not affected because it had adequate supplies of components.

"This afternoon, all of us were back to work because conditions were negotiated properly," the employee said.

The strike was triggered by changes in work rules that would cut overtime pay on which workers rely because their base wages are low, according to Hong Kong news reports.

On Wednesday, Japanese auto parts maker Omron Corp. said it agreed to hike wages for employees at its factory in southern China after some 300 workers walked off the job, forcing Omron to halt some production.

The communist government normally prohibits protests but has allowed the strikes, many of them at foreign-owned companies, apparently trying to put more money in Chinese workers' pockets as part of efforts to boost consumer spending and reduce reliance on exports to drive economic growth.

Beijing froze minimum wages in 2008 to help companies cope with the global crisis but with China's economy recovering, workers want to share in rising revenues.

Honda and Toyota Motor Corp. have repeatedly halted production at assembly plants in China since mid-May after parts suppliers were hit by strikes for higher wages.

In Guangdong province, site of thousands of foreign-owned factories, there were at least 36 strikes for higher wages between May 25 and July 12, the government-run China Daily newspaper said last week. It said most workers received monthly raises of 100 yuan to 500 yuan ($15-$75).

The minimum monthly wage in Guangdong was increased in March to between 920 yuan and 1,030 yuan ($135-$150) in the provincial capital, Guangzhou, and cities in the Pearl River Delta near Hong Kong. Elsewhere, it is as low as 660 yuan ($95).

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Associated Press researcher Bonnie Cao contributed to this report.


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