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Wednesday, 5 November 2008
Workers win payout fight after factory closure
Dongguan handed out another 7 million yuan (HK$7.9 million) yesterday to nearly 4,000 unpaid footwear factory workers abandoned by their Taiwanese boss amid a wave of factory closures in the once-booming Guangdong manufacturing hub.
Dongguan handed out another 7 million yuan (HK$7.9 million) yesterday to nearly 4,000 unpaid footwear factory workers abandoned by their Taiwanese boss amid a wave of factory closures in the once-booming Guangdong manufacturing hub.
The money came on top of the 24 million yuan in municipal funds the city used last month to cover back pay for workers of a bankrupt Hong Kong company, a move that attracted overwhelming criticism.
Guangdong authorities had forecast a prolonged manufacturing slowdown and predicted about 30 per cent of factories in Dongguan could be closed next year, the Southern Metropolis News reported yesterday.
“We don’t care about the economic growth rate now ... Dongguan should prepare for the long-term impact of the global financial crisis,” Dongguan party chief Liu Zhigeng was quoted as saying. “Nobody knows how long the recession will be ... [We’re only sure] next year will be even tougher.”
Provincial authorities promised to resolve the crisis of confidence among manufacturers and said the slowdown would be a rare opportunity for the city to upgrade its industrial base.
The decision to cover the footwear factory’s unpaid wages came after thousands of angry assembly-line workers rallied on the street for three days after smashing up workshops that had been sealed off by authorities ahead of auctions.
Worker representatives estimated the company owed about 7 million yuan in wages, overtime and severance payments to its 4,000 workers, and another 80 million yuan to suppliers and creditors. Officials said yesterday they had not been able to contact the factory owner since Friday.
But senior factory staff and industry insiders said the company collapsed because of a dispute between business partners and uncontrolled expansion, rather than a decline in demand induced by the global economic crisis.
Mainland newspapers reported that at least 1,000 financially troubled footwear factories in Dongguan and neighbouring Huizhou had been abandoned by their owners recently.
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Workers win payout fight after factory closure
Fiona Tam in Dongguan
5 November 2008
Dongguan handed out another 7 million yuan (HK$7.9 million) yesterday to nearly 4,000 unpaid footwear factory workers abandoned by their Taiwanese boss amid a wave of factory closures in the once-booming Guangdong manufacturing hub.
The money came on top of the 24 million yuan in municipal funds the city used last month to cover back pay for workers of a bankrupt Hong Kong company, a move that attracted overwhelming criticism.
Guangdong authorities had forecast a prolonged manufacturing slowdown and predicted about 30 per cent of factories in Dongguan could be closed next year, the Southern Metropolis News reported yesterday.
“We don’t care about the economic growth rate now ... Dongguan should prepare for the long-term impact of the global financial crisis,” Dongguan party chief Liu Zhigeng was quoted as saying. “Nobody knows how long the recession will be ... [We’re only sure] next year will be even tougher.”
Provincial authorities promised to resolve the crisis of confidence among manufacturers and said the slowdown would be a rare opportunity for the city to upgrade its industrial base.
The decision to cover the footwear factory’s unpaid wages came after thousands of angry assembly-line workers rallied on the street for three days after smashing up workshops that had been sealed off by authorities ahead of auctions.
Worker representatives estimated the company owed about 7 million yuan in wages, overtime and severance payments to its 4,000 workers, and another 80 million yuan to suppliers and creditors. Officials said yesterday they had not been able to contact the factory owner since Friday.
But senior factory staff and industry insiders said the company collapsed because of a dispute between business partners and uncontrolled expansion, rather than a decline in demand induced by the global economic crisis.
Mainland newspapers reported that at least 1,000 financially troubled footwear factories in Dongguan and neighbouring Huizhou had been abandoned by their owners recently.
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