[Fact Check] Honda Denies Reported Plans to Lay Off Workers in China
Huang Lin
DATE:  Jan 31 2024
/ SOURCE:  Yicai
[Fact Check] Honda Denies Reported Plans to Lay Off Workers in China [Fact Check] Honda Denies Reported Plans to Lay Off Workers in China

(Yicai) Jan. 31 --  Honda Motor has no plans to let go employees in China, a spokesperson for the local unit of the Japanese auto giant told Yicai, saying recent comments by a senior executive had been misinterpreted.

Managing Executive Officer Masayuki Igarashi reportedly said in a media interview that Honda planned to carry out a large optimization of personnel in China across its four-wheel vehicle, two-wheel vehicle, and general engine businesses.

The Chinese translation of Igarashi’s comments was inaccurate, a spokesperson for Honda China said yesterday. What was meant was that employees who leave the company naturally will no longer be replaced, the person noted.

Honda has been trying to cut costs and bolster profits in recent years through various means, including layoffs, to catch up with the pace of electrification. Last November, it dismissed around 900 contract workers from Guangqi Honda Automobile, the first layoffs at its joint venture with China's GAC Group since it was set up 25 years ago.

Workers involved in the layoffs were dispatch staff and not regular employees, Guangqi Honda Auto told Yicai at the time. Dispatching labor is a flexible employment system that the firm can adjust according to production needs, it noted.

Guangqi Honda Auto will provide compensation according to the law and regulations in a timely manner and actively assist the personnel in finding new work, it added.

However, Honda's shift to electric vehicles was not as smooth as expected after the layoffs. Honda China sold around 1.23 million cars in the country last year, with those sold by Guangqi Honda Auto accounting for about 620,500, down 13.9 percent from the previous year. 

The loss each Honda-branded electric vehicle sold by Guangqi Honda Auto brings to the company is about CNY60,000 (USD8,500), Yicai learned.

The number of vehicles sold by Dongfeng Honda Automobile, Honda's JV with Wuhan-based Dongfeng Motor Group, fell 5.9 percent last year to around 613,700 units.

Editor: Martin Kadiev

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Keywords:   Japanese,Automobiles,Honda