Honda's China assembly plants halt production

Honda Motor, Japan's No. 2 automaker, has been unable to build cars in China since last week after workers at its transmissions plant Honda Auto Parts Manufacturing stopped working on May 7 to demand better pay and benefits.

The strike forced Honda to shut production at its three complete car assembly plants, including Dongfeng Honda Automobile, which has stopped production since May 26.

Honda Auto Parts Manufacturing, Honda’s wholly owned automobile powertrain components production subsidiary in China, was established in March 2007 in Foshan, Guangdong province and is Honda’s fourth integrated automatic transmission production plant in the world.

According to industrial analysts, the adverse effects arising from the strike are a result of Honda’s strategy of producing key parts independently or jointly with other companies. Although the model may increase revenues and reduce costs, it may face potential risks.