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Honda was forced to shut down all four of its Chinese car plants, after 1,850 workers at an auto parts plant went on strike over wages. The strike is reported to have crippled Honda’s production capability in what is now the world’s largest car market.
The lack of parts means that Honda is unable to assemble cars at any of its four Chinese plants. The employees at the parts plant want their wages increased to between 2,000 yuan ($293) and 2,500 yuan per month, from 1,500 yuan ($220). Workers at Honda’s car plants make a similar wage.
“China is experiencing a labor shortage that’s shifting the natural bargaining power to workers,” Chang-Hee Lee, a Beijing-based industrial relations specialist at the International Labor Organization told Bloomberg News. While much of China’s economy is owned by the state (and Honda’s own operations are jointly owned with the Chinese government), governmental authorities claim that Honda has done nothing wrong in the labor dispute. China account for about 17 percent of Honda’s global sales, making it a crucial market for its operations.