A third strike in four weeks hit Honda Motor Co's <7267.T> Chinese suppliers on Wednesday, fuelling concerns that unrest among workers in the world's manufacturing hub is spreading.

Japan's No.2 automaker said a strike and production stoppage had begun on Wednesday at a factory in Guangdong province that supplies locks to all four Honda factories in China.

However, progress was made at another factory supplying Honda exhaust systems, with management and striking workers reaching agreement and resuming production late on Wednesday, according to Honda unit Yutaka Giken <7229.Q>.

The latest walk-out comes amid growing labor disputes in China's Pearl River Delta, a fast-growing and densely populated manufacturing hub home to hundreds of foreign-owned factories.

Strikes are usually stamped out quickly in China over government concerns about social unrest. But more disputes have been erupting lately between workers resentful of large income disparities and harsh working conditions, and employers trying to rein in rising costs.

Honda spokesman Yoshiyuki Kuroda said the automaker expected no disruption so far from Wednesday's stoppage at Honda Lock's factory, with sufficient inventory for now.

But the three-day strike at the exhaust systems plant majority owned by Yutaka Giken would keep both car factories operated by joint venture Guangqi Honda, which builds the Accord, Fit and two other models, idled on Thursday, he said.

That strike started on Monday, just days after Honda settled a strike at a wholly owned transmission supplier that had forced it to halt all output in the world's largest auto market.

Honda shares ended down 2.8 percent in a Tokyo market <.N225> down 1 percent.


Details were not immediately available on the terms of the agreement between management and workers at the exhaust factory.

Earlier, a worker surnamed Yang said workers were pushing for higher pay, compensation for having to shut down for about a week due to disruptions at other plants, and are awaiting a quarterly bonus that was due in March.

I make around 1,700 yuan-1,800 yuan ($249-$264) a month including overtime, he said, adding that he was not one of the workers on strike. It's enough for food and board, but if I want to buy a flat it's definitely not enough. ... Living costs are getting more and more expensive.

The strikes come amid a broader rise in wages in the Pearl Delta, which has created a need for more rational discussions between factories and their managers, said Huang Rurong, director of an employment center close to the affected plant.

Step by step wage increases are a part of China's economic development. This is very normal, said Huang as he smoked a cigarette and sipped green tea in his office. If you're a worker you will of course want more pay. This is very natural.


Despite the recent labor problems, Honda plans to lift production capacity in China to 830,000 units a year from the current 650,000. It sold about 580,000 cars in China last year, about 17 percent of its global sales.

The strikes are certain to affect costs not only for Honda, but also other carmakers in China, said Koji Endo, an auto analyst at Advanced Research Japan.

Foreign firms would have to raise salaries due to severe labor shortage especially around Guangdong, where plants of foreign automakers and electronics makers are concentrated, he said.

One of the region's top employers, Foxconn International Holdings <2038.HK>, a unit of Taiwan contract electronics giant Hon Hai Precision Industry <2317.TW>, has offered workers at its Shenzhen manufacturing hub big pay rises as it tries to deal with fallout from a spate of suicides there.

On Wednesday, Taiwan media also reported that 2,000 workers at a Taiwanese-owned machinery firm in the city of Kunshan near Shanghai had gone on strike on Tuesday seeking higher wages and better working conditions.

($1=6.829 Yuan)

(Additional reporting by Nobuhiro Kubo in TOKYO, Alison Leung in HONG KONG, Fang Yan in SHANGHAI; Writing by Doug Young; Editing by Hugh Lawson and Lincoln Feast)