1,850 workers at its a transmission-making factory (for the City, Jazz Accord and Odyssey) have gone on strike demanding a pay increase from their current monthly salary of 1,500 yuan ($260) to 2,000-2,500 yuan ($345-432). This means Honda will be paying an estimated additional $320,000 a month.
Although the strikes only affect the one manufacturing plant, given Honda's just-in-time delivery of parts and components from one factory to another, any delay at one area effectively shuts down the entire production line.
Labor disputes have become more frequent in China as supply of workers begins to dry up giving workers the ability to bargain for better conditions. The strike at Honda's parts-factory is the first to affect the Japanese car maker and local government and Honda officials are both trying to resolve the pay dispute.
A representative from Honda told AutoNews that the company is planning to make a decision regarding next week's production output tomorrow.
"So far, Honda does not have a timetable for resuming production," Zhu Linjie, spokesperson for Honda Motor (China), told China Daily on Thursday.
This isn't the first time labor strikes have crippled Japanese-owned factories in China. 2005 saw Toshiba and Canon suffer significant losses due to similar actions.