Honda factories in China nearing significant shift in production cost

Honda factories in China nearing significant shift in production costA specialist in the Chinese economy has said that a strike at four Honda factories in China is a sign that a shift in production costs is near.

The New York Times reported on Tuesday that Tomoo Marukawa at Tokyo University, said, "Japan is starting to realize that the age of cheap wages in China is coming to and end."

The newspaper further said that the strike that began at a Honda transmission plant in Foshan, China, in mid-May spread to three other Honda plants. Combined, the factories turned out 58,814 vehicles in April.

According to the reports, Honda recently announced it would increase production in China by 30 percent to make 830,000 cars and minivans a year.

With 1,900 workers on strike to protest low wages and poor working conditions, production, temporarily has come to a standstill.

According to the official data, Honda's Japanese workers earn about 50 times what a Honda worker in China earns, but the tide may turn soon.

Tatsuo Matsumoto, a researcher at the Japan Center for International Finance, said that Chinese workers not only expect higher wages, but "Japanese manufacturers need to raise morale by making sure that local staff can also climb within the company." (With Inputs from Agencies)