A 24 percent pay raise for 1900 Honda workers in China has convinced many to end their strike action of the past two weeks and return to the production line.
Honda has increased worker salaries from 1544 yuan to 1910 yuan a month ($269 to $332) at its four Chinese factories, but production is not expected to resume to full capacity until early next week.
The increase fell short of employees’ demands but is now almost 1000 yuan higher than the legal minimum wage of 920 yuan ($160 a month).
Honda last night confirmed many workers had returned to the Foshan transmission plant on Monday afternoon and expected a factory which assembles Jazz models for export to resume work by Wednesday.
“We are currently trying to convince those who continue to object to the offer ... to return to full operation as soon as possible,” Honda said in a statement.
Those who are yet to return remain dissatisfied with Honda’s offer, and told stories – unconfirmed by Honda – that around 80 workers had been stood down after refusing a meagre 11 yuan a month ($1.90) pay raise.
“It’s a matter of dignity,” said a young worker. “What they’re offering us is not enough to live on.”
There is also tension between workers and the Communist Party-tied labour union which historically sides with management and discourages independent activism.
Honda has lost thousands of sales from the strike action, which began at the Foshan plant on May 17, and is expected to add overtime shifts to make up for the production losses.
Honda’s four factories in China have the capacity to build around 650,000 vehicles a year including the Jazz, Civic, Accord and Odyssey models.
Honda CEO, Takanobu Ito, previously said that Honda hopes to increase sales in China by nine percent in 2010 to 630,000 vehicles.
It plans to introduce two new models to the line by the second half of 2012 and boost production capacity by 28 percent to 830,000 vehicles.