Honda Motor Co said it will resume car output at four plants in China on Friday but the outlook for next week remains uncertain as some workers at a parts factory have not yet agreed to a full return to work.
Japan's No. 2 automaker suspended vehicle production in the world's biggest car market last week after employees at a 1,900-strong wholly owned parts factory in Foshan, Guangdong province, refused to work until their demands for more pay and other conditions were met.
The parts factory resumed full production on Wednesday but part of the workforce agreed to return only until Friday, when they expect Honda to respond to a list of as-yet unmet demands.
For sure, we will go on strike again if we don't get a satisfying answer, said parts factory worker Li, who only offered his surname for fear of management reprisals.
The carmaker said two assembly plants run by Guangqi Honda, a joint venture with Guangzhou Auto Group's listed arm, Denway Motors, as well as an exports-only factory that is majority owned by Honda would restart Friday morning.
A separate factory run by Dongfeng Honda, which is partly owned by Dongfeng Motor Group Co Ltd, would resume output Friday afternoon.
Production will continue through Saturday but Honda said the decision of whether to continue factory operations beyond then would depend on the outcome of talks with workers.
Sunday is a holiday.
The problem for Honda is that the transmission plant is wholly foreign-owned, said Zhang Xin, an analyst with Guotai Junan Securities, referring to the parts factory. If it were a JV, the Chinese side would have stepped in early on and it wouldn't have gotten as ugly as it is today.
Although not technically illegal, strikes in China are often seen as a threat to social order and are quickly stamped out. More disputes have been erupting lately between workers resentful of income disparities and harsh working conditions and employers trying to contain costs.
Living costs in major Chinese cities are pretty high, said Zhang, who is based in Beijing. After Honda and Foxconn, there could be similar disputes, especially in foreign-owned companies.
Companies have complained that rising production costs in China, especially in the Pearl River Delta, are eating into their profit margins.
But China's manufacturing centres continue to rank as more competitive than other supply region in Asia, according to research reports released by the Hong Kong Trade Development Council.
(Additional reporting by Fang Yan; Editing by Don Durfee and Michael Shields)