SHANGHAI — Employees are beginning to return to work after a massive protest at factories of one of the world’s largest shoe manufacturers located in the southern Chinese city of Dongguan.
This story first appeared in the April 28, 2014 issue of WWD. Subscribe Today.
The strike at the manufacturing facilities operated by Yue Yuen Holdings Ltd., which makes shoes for a number of global brands, including Nike Inc. and Adidas AG, has involved tens of thousands of workers over employee benefits. Labor rights groups say the strike is one of the largest in recent Chinese history. It began in early April and escalated over the past week and a half after Yue Yuen failed to meet the workers’ demands.
In an e-mailed statement, Adidas said it is “currently reallocating some of the future orders originally allocated to Yue Yuen Dongguan to other suppliers.”
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“At the same time, we’d like to point out that we are not pulling out of Yue Yuen factory in Dongguan, and we have no plans to do so,” the company added.
Adidas said that the Pou Chen Group, the Taiwanese-owned parent company of Yue Yuen, is “in discussion with the local government and trade union federation to address the concerns expressed by the workers.”
It is unclear exactly how many have returned to work. When reached by phone, employees said the situation is tense, with police monitoring phone and online communication between workers, detaining protestors as well as employees of nonprofit labor rights groups that have been advising the strikers. One employee, who requested anonymity, said police are now patrolling the factories and stopping those who have returned to work from leaving facilities. The employee said Yue Yuen has been offering higher pay to those who agree to return.
“They threatened that those who did not work would be fired and taken out of the factory by police,” the employee said.
It appears government involvement with the strike has been heavy-handed. The situation itself presents a complicated scenario. In China, protests are illegal, as are labor unions not backed by the government. There is little choice but for the government to get involved in the negotiating process, as failure to do so, and to try to at least advocate for some employee demands, could have a ricochet effect here, leading to more protests among blue-collar workers who are increasingly making more demands for broader labor rights.
According to New York-based China Labor Watch, a document released this week by a local government trade union says Yue Yuen must provide unpaid social insurance to workers and that it supports the election of worker representatives to negotiate with Yue Yuen management. China Labor Watch said the government response, while not fully meeting the demands of the workers, “creates an important precedent.”
“Unpaid social insurance is a pervasive issue in most Chinese factories, including suppliers to major international brand companies,” China Labor Watch said in a statement. “Despite the positive replies from both the union and government officials, it remains to be seen if these measures are fully implemented.”
The document from Dongguan’s government also said that Yue Yuen’s management told workers that if they were absent from work for more than three days, the company reserved the right to fire them. China Labor Watch said that despite the government response, many employees are continuing to strike.
Yue Yuen has agreed to fully pay into the workers’ social insurance and housing funds as well as make up for unpaid social insurance benefits by the end of next year, the state-run China Daily newspaper reported earlier this week.