BEIJING--Workers at a major shoe maker in southern China have
walked off the job in a dispute over social-insurance payments,
disrupting production and highlighting the increasingly testy labor
relations in the world's No. 2 economy.
Workers at some facilities of Yue Yuen Industrial (Holdings) in
Dongguan in Guangdong province went on strike for a third day on
Wednesday, according to employees and labor-rights activists.
Hong Kong-listed Yue Yuen employs more than 40,000 workers at
its Dongguan facilities, and is a supplier for Adidas AG and Nike
Inc.
A spokeswoman for German sporting-goods company Adidas said Yue
Yuen's plant that makes products for Adidas is operating with about
50% of its workforce. Adidas said it has had no slowdown in
production volumes and China is still the most critical sourcing
market for the company. Workers said most of the workforce at that
part of Yue Yuen's operations had walked of the job.
A spokesman for Nike said the company is "aware of and concerned
by the events at the Yue Yuen factory" and is monitoring talks
between workers and factory management, as well as production of
its products.
The number of workers taking part in the labor action was
unclear but employees at the plant said that there were "large
numbers" of police in streets near Yue Yuen's facilities.
The official Xinhua News Agency said that about 600 people took
part in a protest at the same facilities earlier this month.
Workers gave considerably higher figures.
Photos sent to The Wall Street Journal by workers showed what
appeared to be crowds of hundreds of people gathered in the streets
near the plant, though it was unclear when the photos were
taken.
Workers said that the dispute was centered on levels of social
insurance, adding that the company had made contributions based on
basic wages rather than total pay.
Mr. Li, 38 years old, a native of Shaanxi province in north
China, said his monthly salary is about 3,500 yuan ($565) but his
social insurance payments were based on income of 1,810 yuan.
He also alleged the company wasn't making proper contributions
to a housing fund.
"We workers abide by laws. Shouldn't the employer abide by laws,
too?" said Mr. Li, who has been working at Yue Yuen for 18 years,
mostly at company warehouses.
Yue Yuen officials in Hong Kong couldn't be reached, though a
company official in Dongguan said that the issues were being
discussed with workers.
Xinhua quoted an executive of the company as confirming that the
social-insurance payments were below the levels required by law,
adding that housing payments were made for only about 1,000 of the
plant's total workforce.
Workers said Yue Yuen had promised to pay insurance according to
law starting in May, but said the company is unable to pay the
amounts that should have been paid for the previous years.
The problems at Yue Yuen are the latest in a spate of disputes
involving foreign companies in China. Retailer Wal-Mart Stores
Inc., U.K. drug company GlaxoSmithKline PLC and International
Business Machines Corp. have all faced disputes with Chinese
employees this year.
The demands raised by Yue Yuan workers reflect issues faced by
most workers in China's manufacturing industry, and the resolution
of this dispute will become an important precedent, according to
not-for-profit organization China Labor Watch in Hong Kong.
A video of the strike from China Labor Watch appeared to show
police attempting to quell thousands of workers as they marched
down a long avenue in Dongguan.
A spokesman for the police in the area of Dongguan where the
plant is located declined to comment.
Liyan Qi, Laurie Burkitt and Lilian Lin contributed to this
article.
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