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Strike at Honda parts plant in China drags on
by Staff Writers
Beijing (AFP) July 20, 2010


China's SAIC Motor says first half profits surged
Shanghai (AFP) July 20, 2010 - China's SAIC Motor Corp said Tuesday its estimated first-half net profit had more than quadrupled from a year earlier, although sales slowed slightly in the second quarter. The nation's largest automaker by number of sales sold more than 1.77 million vehicles in the first half of 2010, up more than 44 percent from a year earlier, according to a statement filed with the Shanghai Stock Exchange. The figure indicated sales growth lost some momentum in the April-June period. The firm sold more than 891,800 vehicles in the first three months of the year, up 63.6 percent from the same period a year earlier. SAIC, which has joint ventures with US auto giant General Motors and Germany's Volkswagen, did not give specific figures for first-half earnings in its preliminary announcement.

The company is scheduled to release its first-half results on August 26. It posted a net profit of 1.4 billion yuan (213.2 million dollars) in the first half of 2009. China's auto sales soared to 13.64 million units in 2009 helped by government incentives, outstripping sales in the United States and making the Asian giant the world's biggest auto market. The incentives included slashing taxes on cars with engines smaller than 1.6 litres and subsidising clean-technology vehicles. Auto sales soared 47.7 percent in the first half of 2010 compared to a year earlier, reaching 9.01 million units, although monthly figures showed a continued trend of softening demand, according to the China Association of Automobile Manufacturers.

A strike by workers at a Honda parts supply factory in southern China has entered its second week, but car production has so far not been affected, the Japanese automaker said Tuesday.

The strike is the latest in a series of walkouts by factory workers -- many of them at foreign-invested companies -- over pay and poor conditions in the so-called "workshop of the world".

The work stoppage at a unit of Atsumitec Co., which supplies gear shift levers for Hondas made in China, began on July 12.

"The strike continues," a Honda spokeswoman in Tokyo told AFP, adding that negotiations between management and workers were still under way.

The labour action has had little effect on Honda's China production, as the company is relying on inventories, she added.

An Atsumitec employee in the city of Foshan confirmed to AFP that about half of the factory's 200 workers were still on strike over their demands for a salary increase.

Honda is the largest shareholder of Atsumitec, controlling 48 percent of the Shizuoka-based company, she said.

China's state Xinhua news agency reported early Tuesday that the strikers, who are seeking a raise of 500 yuan (73.70 dollars) per month, had blocked replacement workers hired by the company from entering the plant.

"We have police stationed near the plant to guard against any emergencies, but as to how to resolve the problem, it is still a tough question," the agency quoted a local official, Zhong Weiwen, as saying.

Honda, Japan's number two automaker, said last week its sales had fallen 2.7 percent year-on-year in June after its China operations were crippled in recent weeks by work stoppages.

Takanobu Ito, president of Honda, apologised Tuesday about the "commotion" created by the strikes.

"What we have discussed within Honda is that employees and the local management did not have enough communication," he told reporters in Tokyo.

"There are lessons to be learnt from the China case -- we need to have good communication... It is an area we need to work on (and) measures have been introduced at the management level."

burs-sst/pst

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