Yucheng (Yu Yuen, owned by Pou Chen) Shoe Factory Workers Strike in Dongguan

13:24 Nov 17 2011 Dongguan China

Yucheng (Yu Yuen, owned by Pou Chen) Shoe Factory Workers Strike in Dongguan Yucheng (Yu Yuen, owned by Pou Chen) Shoe Factory Workers Strike in Dongguan Yucheng (Yu Yuen, owned by Pou Chen) Shoe Factory Workers Strike in Dongguan
From CLW:

In Huangjiang Township, near Dongguan in Guangdong province China, over 7,000 workers walked off the job at the Yucheng factory, owned by a Taiwanese investment firm. They then surrounded the factory and blockaded the town’s main road in the largest protest against a Taiwanese company in 2011. During the protest, dozens of workers were injured in clashes with police and public security personnel.

The anger behind this protest had been building for some time. On October 27th, the factory suddenly dismissed 18 section managers, in a move seen by workers as a preparation for relocation. According to several media reports, the riot erupted due to new, widely-condemned regulations set by the factory management. The new rules axed all bonuses regardless of worker performances for as long as the factory was suffering losses. The new regulations, which led to the strike, also aroused fear among the workers that they might be dismissed someday.

This protest and strike illustrates the unfairness of the relationship between labor and capital in the Chinese economy and the lack of channels for Chinese workers to communicate their frustrations. It also shows how factory management is opaque, releasing decisions that have not been made with the consent or even foreknowledge of workers. While workers have become more conscious of their rights, managers still often cling to the same antiquated management model of using force to control their employees. This has only intensified the conflict between workers and management.

The specific grievances the workers have against Yucheng factory management are as follows:

1. The factory fired workers illegally.

2. The factory did not respect the workers, and managers would verbally abuse the workers.

3. The factory did not negotiate with workers before they made the decision about moving their plant and did not provide a reasonable plan for the workers to do so.

4. The factory did not negotiate with workers before set their new rules. The reward system is not transparent.

5. The labor union was not adequately protecting the workers’ rights.

China Labor Watch calls upon the Yucheng shoe factory workers and management to sit down and have a full and frank discussion about the situation at hand and for the factory management to issue a statement recognizing the workers’ demands as valid. However, in addition to Yucheng management assuming responsibility for the workers’ dissatisfaction, New Balance, the factory’s principal client, must also assume responsibility for the situation. They bear this responsibility because they have consistently driven down the price of their purchase order, dodging the issue of labor costs, therefore all but forcing Yucheng to keep worker compensation and spending on working environments low to meet New Balance’s price and quality requirements. The shortcomings at the Yucheng factory and the strike that resulted from them illustrate the failings of New Balance’s social responsibility policy, to the extent that workers must strike and protest to ask for the respectful treatment that they deserve. New Balance cannot completely avoid responsibility for what happens at this factory. China Labor Watch calls on the Yucheng shoe factory and New Balance to work together to address the workers’ demands.

From Financial Times:

Thousands of workers have returned to work at a shoe factory in the southern Chinese industrial city of Dongguan, amid allegations of police brutality to quell their protests on Thursday.

At least 2,000 workers protested outside the shoe factory on Thursday against the sacking of middle managers and the suspension of overtime, which effectively cuts their wages. The factory is owned by the Taiwanese company Pou Chen, which makes shoes for brands like Nike and Adidas.

Workers said the firings were related to a drop in orders at the factory and a decision by management to move jobs to another factory in the inland province of Jiangxi.

About 19 workers were detained by police and later released, according to internet reports. Several posted photographs online of beatings they had sustained in the protests.

A reporter covering the protests for Southern Daily, a Guangzhou newspaper, wrote in a blog about overhearing a conversation between a child and his injured father.

“Why didn’t you call the police after being beaten?’” the child asked.

The father told his child he was beaten by police, the reporter said.

Factories in southern China are struggling because of rising labour costs over the past year, and a collapse in orders from Europe since the third quarter as the EU debt crisis has dragged on.

Earlier this week, Zhu Xiaodan, Guangdong’s acting governor, said the province, which accounts for a quarter of China’s trade, had recorded a drop in exports of about 9 per cent in October because of a collapse in orders from Europe. He said that contrasted with the growth of imports and exports of 26 per cent in the first half of the year.

As labour costs have risen by double-digit rates this year, many companies have moved production from southern China to south-east Asia and China’s inland provinces.

Geoffrey Crothall of the China Labour Bulletin, a Hong Kong-based workers advocacy group, said he expected more labour unrest over the issue.

“It’s going to be tricky convincing workers [in Guangdong] to move inland,” said Mr Crothall, who said many young migrants preferred living in Guangdong’s bustling cities. “ It’s pot luck where the relocation happens. Will workers have to sign new contracts if they are moved inland?”

Pou Chen fired 18 middle level managers and workers in late October, one of the factors that prompted yesterday’s protest. One of the factory managers who lost his job wrote in a blog that the company had promoted him as recently as July.

“I have won awards every month. I love my factory and my family works here too,” he wrote in a post late last month.

Pou Chen did not respond to queries about the protests.

Additional reporting by Zhou Ping

From Caijing:
























From CLB:

Around 7,000 workers at a Taiwan-owned shoe factory in Dongguan took to the streets today, 17 November, in protest at salary cuts and the earlier dismissal of 18 managerial staff, according to posts on Tianya and a Southern Daily reporter’s microblog.

Photographs posted online showed large numbers of police on the street and bloodied workers who claimed to have been beaten by the police. Several other workers had reportedly been detained.

The strike at the Yue Cheng factory in Huang Jiang township was triggered by the dismissal of 18 managers in late October. The company claimed they had been dismissed because of the factory’s decreasing orders and sluggish business. But one of the managers told China Business News that the real reason behind their dismissal was that the factory planned to shift production to Jiangxi in a bid to combat rising costs in the Pearl River Delta.

“We’ve been loyal workers for over a decade in this factory. But now the factory decided to fire us on the sole excuse of bad business operations and cost pressures. How can they be so irresponsible?” one dismissed manager wrote on his internet post.

So far, the factory has not commented on the dispute. Yue Cheng is a subsidiary of Hong Kong-listed Yue Yuen Industrial Holdings, which makes sports shoes for New Balance, Nike and Adidas. Its Taiwan-based parent company, Pou Chen Corporation is one of the biggest shoe manufacturers in the world.

Early this month, another Taiwanese shoe maker in Dongguan, Stella, saw more than 2,000 of its workers strike in protest at its relocation plans and issues related to compensation.

From Focus Taiwan:

Taiwan-based Pou Chen Corp., one of the world's leading contract footwear makers, said Saturday a strike at a China production base of its subsidiary Yue Yuen Industrial (Holdings) Ltd. will have little impact on the parent company's operation.

Pou Chen, which rolls out products for international brands like New Balance and Nike through its broad facilities in China, said Yue Yuen is still negotiating with the union and workers at the Dongguan plant in Guangdong Province in an attempt to put the workers back on production lines as soon as possible.

Pou Chen said while the strike has caused an interruption in some of the production lines at the Dongguan site, the facility has inventory of about two weeks, so it is unlikely that the protest will seriously affect the company's operation and finances.

Once the management and employees reach a consensus to restore production, the company said, Yue Yuen will try its best to raise production and make up the shortage caused by the strike.

In addition to the Dongguan plant, Yue Yuen runs operations in other Chinese cities, such as Zhuhai and Zhongshan, as well as in Vietnam and Indonesia.

The strike broke out on Thursday in front of the Dongguan production site, with thousands of workers staging a protest against Yue Yuen's decision to fire several middle management staffers and a warning that employees' bonuses might be cut.

Local media had reported that the employees at the Dongguan plant, which is located in the Yue Yuen Industrial Park, were also unhappy about some harsh rules imposed by the company to restrict certain freedoms.

The reports said the proposed bonus reduction was a result of falling orders as global demand has been impacted by weakening economic fundamentals.

The strike resulted in some injuries to a number of workers after police stepped in to deal with a series of scuffles, while the traffic around the industrial park was paralyzed by the protest, the reports said.

According to Pou Chen, although Yue Yuen had tried hard to communicate with its workers on the changes in the company's policy, the employees failed to gain a better understanding and so took to the streets.

After the news of the strike surfaced Friday, Pou Chen shares plunged 2.77 percent to close at the day's low of NT$22.80 (US$0.75) on the Taiwan Stock Exchange. (By Maranda Hsu and Frances Huang) enditem/npw
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