The industrial unrest at Yue Yuen Industrial (Holdings), now
stretching to around ten days and sparking sporadic scuffles
with police, has centered on issues including unpaid social
insurance, improper labor contracts and low wages. Workers have
demanded improved social insurance payments, a pay rise and more
"The factory has been tricking us for 10 years," said a female
worker inside a giant industrial campus in Gaobu town run by Yue
Yuen in the southern factory hub of Dongguan in the Pearl River
Delta. "The Gaobu government, labor bureau, social security
bureau and the company were all tricking us together."
A spokesman for Yue Yuen said the firm, which makes shoes for
the likes of Nike, Adidas, Reebok, Asics and Converse with a
market capitalization of some $5.59 billion, had agreed to an
improved "social benefit plan" on Monday, while stressing the
business impact had been "mild" so far.
"Basically, the terms that we announced yesterday was after a
very thorough internal analysis and calculation and considering
all the factors including the affordability from the factory
perspective," the spokesman told Reuters by phone.
"The revised plan will be effective from May 1, about a couple
of weeks from now."
Despite this, thousands of workers, most out of uniform but with
factory lanyards and ID cards around their necks, loitered in
and around the leafy industrial estate, lounging on plastic
chairs, sitting on curbs, chatting, drinking tea and nibbling
nuts, refusing to return to their production lines.
Hundreds of police remained stationed in the area, some with
riot shields and German Shepherds on leashes.
SOCIAL INSURANCE DISPUTE
The strike fits a growing pattern of industrial activism that
has emerged as China's economy has slowed. A worsening labor
shortage has shifted the balance of power in labor relations,
while smartphones and social media have helped workers organize
and made them more aware than ever of the changing environment,
A key point of contention at Yue Yuen has been the perceived
scamming of workers through inadequate contributions from the
firm into a social insurance scheme each month, and the
difficulty of cashing in or transferring this money later.
But Yue Yuen's spokesman said: "If we raise the social security
payment on the company part, which we are committed to do, it
will also be a larger deduction from the employees' monthly
checks, so the net they can pay may be lower as a result."
Li Qiang, a labor expert with China Labor Watch, a U.S.-based
labor NGO, said the social insurance problem was longstanding
and one which workers were no longer willing to tolerate, given
improved legal and rights awareness.
"This is a costly lesson to multinationals to not ever ignore
the rights of workers," Li told Reuters.
In over 400 factory probes conducted by the group over the past
decade, none was found to have bought full mandatory social
insurance for workers as stipulated under Chinese law.
Scores of factory hands interviewed by Reuters said thousands,
even tens of thousands, remained on strike, including those in
other Yue Yuen factories in the region, including Huangjiang
town, accounts that matched those of online and social media
An independent labor organization run by labor rights activist
Zhang Zhiru, who has been in close touch with Yue Yuen strike
organizers, said more than 30,000 workers went on strike on
Monday, and even more on Tuesday in as many as six plants.
Online posts by workers have also called on Nike to pressure
management to reform the firm's labor union and allow workers to
elect their own president.
Yue Yuen says on its website it is "the world's largest branded
footwear manufacturer" and made over 300 million pairs of shoes
last year, with its production evenly split between China,
Indonesia and Vietnam. It notched up net profit of $434.8
million in 2013 off $7.58 billion in revenue.
(Additional reporting by Fiona Li and James Pomfret;
James Pomfret; editing by Nick Macfie)
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