Hi-P International Electronics Workers Protest in Shanghai

17:25 Dec 2 2011 Shanghai China

From BusinessWeek:

More than 1,000 workers have protested at a Hi-P International Ltd. factory in Shanghai after the company undertook layoffs because it’s relocating production, according to China Labor Watch.

Several workers were injured and others were arrested in confrontations between protesters and police, the New York-based rights group said in an e-mailed statement today. The demonstration’s impact is “very minimal” and the company is working with relevant authorities, Hi-P International said in an e-mailed statement.

Manufacturing costs in China are rising as the government raises minimum wages and allows its currency to appreciate as part of efforts to reduce the economy’s reliance on exports and spur domestic consumption. A campaign to encourage investment in poor regions of western and central China with incentives including lower taxes is at the same time luring manufacturers from coastal areas further inland.

Shanghai has the highest average income of any region in China at 66,115 yuan ($10,441) for 2010, the People’s Daily reported today, citing a report by the Ministry of Human Resources and Social Security. The north province of Heilongjiang had the lowest average income of 27,735 yuan, the newspaper reported.

Minimum wages for workers in Shanghai were raised by 14 percent in April to 1,280 yuan ($202) a month.

Hi-P, which makes components for mobile phones, personal digital assistants, hard disk drives, MP3 players, computer peripherals, and medical devices, last month said it expected profit would fall this year from 2010 as higher costs erode an increase in revenue.

Labor Costs

The company said it faces “pricing pressure, higher materials costs due to change in product mix, increased labor costs, additional costs due to activities arising from sites’ consolidation,” according to its third-quarter earnings report. The company’s revenue gained 8.1 percent to S$308.6 million ($240 million) during the three-month period, while net profit plunged 81 percent to S$6.47 million.

The Hi-P workers didn’t receive the legally mandated level of compensation for being laid off without notice, China Labor Watch said in its statement. Thousands of workers previously protested at the same Hi-P plant for 10 days in July also because of sudden layoffs as the company decided to shift more of its production to the city of Suzhou, China Labor Watch said.

Shanghai’s police department didn’t immediately respond to faxed questions seeking comment.

Founded in 1980, Hi-P International has 15 manufacturing plants globally, including five locations in China, according to its annual report. In addition to the China factories in Shanghai, Chengdu, Tianjin, Xiamen and Suzhou, the company also has plants in Mexico, Poland, Singapore and Thailand, the report said. The company has more than 20,000 employees worldwide, it said.

From AP via the Sacramento Bee:

TROUBLE IN WORKERS' PARADISE: China is seeing a fresh upsurge in labor unrest as slowing demand for its exports in Europe and the U.S. hits manufacturers.

JOBS SHORT-CIRCUITED: Hundreds of laid-off factory workers gathered Friday outside the Shanghai factory of Hi-P International, a supplier to major consumer electronics companies like Motorola and HP. New York-based China Labor Watch said Hi-P was shifting some production to the nearby city of Suzhou and had not paid legally required compensation to laid-off workers.

GOVERNMENT RESPONSE: This week Beijing began reversing its two-year effort to cool the world's second-biggest economy as worries that slowdowns in factory production and overshadow longer-term efforts to tame inflation and temper China's excessive reliance on investment as a driver of growth.

Read more:

From Reuters:

More than 200 workers at a Singapore-owned electronics plant in Shanghai remained on strike for a third day on Friday to denounce what they said was a management plan for mass layoffs, the latest outbreak of labor unrest in China.

Blue-jacketed workers, chanting slogans and holding aloft banners demanding management explanations, blocked the entrance to the factory owned by Hi-P International in the Pudong district of China's commercial hub.

Hi-P is an electronics contract manufacturer whose customers include Apple and BlackBerry maker Research in Motion, according to media and analyst reports.

The workers first stopped work on Wednesday, denouncing what they said was a plan to relocate the plant to a Shanghai suburb and demanding compensation for layoffs. Workers said the company planned to hire new staff.

Hi-P International denied that it had fired workers.

"The company is currently in discussion with the workers with the support of the authorities and the labor union," the company said in a statement to the Singapore stock exchange. "The matter is expected to be resolved shortly."

It added that "there is no material impact" to the company's production due to the strike.

Strikers told Reuters they had refused to sign agreements stipulating that their jobs would be terminated by the end of the year without compensation. They said the plant employed more than 1,500 workers, most of them women.

Dozens of police officers kept watch on the workers. Workers said police had beaten up some protesters on Wednesday. Calls to Shanghai's public security bureau went unanswered.

"Give me justice!" workers shouted. Banners held up by strikers included: "We want an explanation, we want the truth."

"They are moving the factory but I don't want to go there," said one worker surnamed Zhang, 28. "Now they just don't want to compensate us. They do not want to even give us a single cent."

Workers planned to press their stoppage through the weekend.

Hi-P International's shares had fallen 2.5 percent on Friday in late afternoon trade but recovered to close down 0.8 percent -- compared to a 0.4 percent rise for Singapore's Straits Times benchmark index.

Strikes this year have pitted workers frustrated about rising costs against companies struggling with an external economic slowdown. The ruling Communist Party fears public discontent could erode its authority and alarm investors.

In factory towns across the export powerhouse in the Pearl River Delta, strikes have been triggered by a cycle of slowing orders from the West and pressure for pay rises.

Thousands of striking workers have crippled production for Western brands at shoe and bra factories in Guangdong province and watch, sport and electronics plants to the south and west.

Stoppages disrupted production last year for automakers, including Toyota and Honda, exposing the demands of 150 million migrant workers. Many provinces boosted minimum wages.

But businesses struggling with razor-thin profit margins, may have difficulty increasing pay this year.
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