Honda Motor’s (HMC.NYSE, 7267.TYO) profits may fall as much as US$109 million after the company implements wage concessions in China, Bloomberg reported. Worker walkouts in three of Honda’s auto parts factories in China forced shutdowns in the worst strikes the company has witnessed in 18 years of manufacturing on the mainland. Honda agreed in May to raise worker pay 24%, and analysts predicted that net income could fall as much as 5% as further labor unrest narrows margins for car companies like Honda with limited monopoly power. While the walkouts have disrupted operations at Honda’s four factories in China, normal operations are expected to resume today following the national holiday.
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