Strike disrupts output at massive Chinese shoe factory for sixth day

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nike2 Bloomberg A Nike running shoe. Workers at a Chinese factory of the largest maker of branded shoes, which supplies Nike, Adidas and other companies, are on strike over pay and benefits. Photo: Bloomberg

Shanghai - Workers at the largest maker of branded shoes, which supplies companies including Adidas and Nike, disrupted output for a sixth day yesterday in a strike over pay, benefits and the right to elect their own union.

The government, trade unions and factory owner Yue Yuen Industrial Holdings are still negotiating to end the strike, according to Sabrina Cheung, the spokeswoman for Adidas, which she said had been monitoring events.

Workers were seen coming to the plant in the southern Chinese city of Dongguan, clocking in and then leaving yesterday. Some staff, who asked not to be identified because they or their family members could lose their jobs, said they were still on strike at the facility.

The labour dispute at the factory complex, which employs more than 40 000 people, adds to Chinese manufacturers faced with disruptions as wages rise and workers demand better compensation.

Rising costs have prompted some employers to move production outside the country.

Yue Yuen had offered to increase benefits, George Liu, a spokesman for the company, said on Friday. He did not immediately answer calls seeking comment yesterday. Taiwan-based Pou Chen Group is the company’s parent.

Employees interviewed at the factory yesterday and at the weekend said the Hong Kong-listed company had failed to agree on demands for more pay, a change in contract status and reimbursement for unpaid benefits contributions.

Some workers demanded no punishment for strikers and the right to elect their own union leaders.

The strikers have expanded demands after an initial dispute over contributions to government-mandated social security and housing benefits for workers.

Monitoring group China Labour Bulletin said on its website that strikers at the Dongguan facility numbered at least 10 000, while Yue Yuen said last week that more than 1 000 workers were on strike.

Liu of Yue Yuen did not immediately respond yesterday to calls requesting comment on the strike negotiations.

Walmart and IBM faced strikes earlier this year in China by workers demanding better compensation.

China’s wages are set to increase by 10 percent or more this year, driving more low-cost manufacturers out of the country and boosting consumption, according to analysts at firms including Bank of America.

Nike has produced more shoes in Vietnam than in China since 2010. Adidas said in 2012 that it would close the last factory it owned in China.

Police with riot gear and dogs were present outside Yue Yuen’s 1.4 million square metre factory complex in Dongguan yesterday.

Dozens of workers were taken away by police last week, the official Xinhua News Agency reported on Thursday, without saying why the workers had been taken. No one was injured and there were no clashes, Xinhua reported.

Police had told workers not to congregate around the factory, said three workers who asked not to be identified because they or their family members could lose their jobs.

Pou Chen was in discussions with the local government to resolve the striking workers’ concerns and an investigation would be conducted as soon as the strike ended, Adidas China said in a statement on Friday.

Nike was aware of and concerned by the events and was “continuing to monitor the dialogue between factory management and the workers, as well as production at the factory”, the US-based company said on Friday.

Shares in Yue Yuen rose 0.2 percent in Hong Kong last week, closing at HK$26.10 (R35) on Thursday. Markets in the city were closed yesterday and on Friday for holidays.

The shoe maker, which had 423 000 employees as of 2012, was founded in 1988 by Taiwanese owners and has factories in China, Vietnam and Indonesia, according to its website. – Bloomberg


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