Honda Motor Co <7267.T> made slow progress on Tuesday in bringing production back at an unusually prolonged and high-profile strike at a parts factory in south China.

Japan's No.2 automaker said most of the 1,900 workers -- including about 600 interns -- at the wholly-owned parts factory had agreed to management's offer for a 24 percent wage hike, with less than 100 holdouts still refusing the terms after violent clashes on Monday.

But as of midday Tuesday, production at the factory, in Foshan, Guangdong province, had yet to resume, while workers inspected equipment and prepared to restart the line, Honda spokesman Yoshiyuki Kuroda said.

China has been hit with a string of labor disputes at foreign companies, whose migrant workers have begun to demand better pay and conditions.

Strikes are technically illegal in China, which fears any overt signs of social unrest, but have become more common lately as employers try to rein in rapidly rising costs, especially in southern China, dubbed the world's workshop.

Honda has been unable to build cars in the country since last week after workers at the parts plant went on strike demanding higher pay. With few transmissions built and inventory running low, Honda said it planned to keep four local assembly plants idle through Wednesday.

The company said it would decide later on Tuesday what its plans were going forward.

At a dormitory for workers in a nearby village, an 18-year-old intern told Reuters a company representative came by to tell workers not to go to work on Tuesday in case of a repeat of conflicts that flared up the previous day.

On Monday, some striking workers displayed scratches underneath their shirts, saying they were roughed up by union officials who tried to push them out of factory grounds as police and reporters watched.

The Communist Party-backed All China Federation of Labour Unions discourages independent worker activism and generally sides with management.

The tussle between union members, striking workers and those trying to work within the factory was preventing a smooth transition to operations, Honda's Kuroda said.

The factory had initially planned to produce manual transmissions through the night shift on Monday, but work was cut short after less than three hours, he said.


On Tuesday morning, about 100-200 angry workers approached the factory gate from inside the compound to appeal to reporters, complaining about being beaten by union members the day before, according to a witness.

The intern, who asked not to be identified due to the sensitivity of the matter, said many workers were not signing the contract yet because they want to see how the company responds to Monday's violence.

Including a small exports-only factory producing the Jazz subcompact, Honda has capacity to build 650,000 cars a year in China, the world's fastest-growing car market.

The company had offered an increase of 477 yuan per month for interns, whose pay ranged from 900 to 1,300 yuan per month, the intern said.

The interns are students who are required by their schools to get work experience, with internships lasting between six months to a year and a half, he added.

The parts factory, which builds manual and automatic transmissions, offered to lift workers' monthly starting salary by 366 yuan ($53.59) to 1,910 yuan ($279.6).

Around midday, security levels appeared to have returned to normal at the site.

Other foreign firms have also been raising wages following criticisms about pay and conditions.

Taiwan's Hon Hai Precision Industry Co Ltd <2317.TW> said last week it plans to raise salaries by about a fifth at its Foxconn International <2038.HK> unit, maker of Apple Inc's iPhone, as it struggles to stop a spate of suicides and quell public anger.

Honda's shares were down 0.5 percent in afternoon trade, roughly in line with the broader Tokyo market <.N225>.

(Reporting by Chang-Ran Kim in TOKYO; Alison Leung in HONG KONG; Fang Yan in SHANGHAI, and Stephanie McIntyre; Editing by Lincoln Feast and Bill Tarrant)