Tire com­pany’s buy­out worries Chi­nese work­ers

China Daily (Hong Kong) - - NATION - By JIN ZHU in Bei­jing ZHAO RUIXUE in Ji­nan

Fears of be­ing laid off and los­ing their ben­e­fits have nearly 5,000 Chi­nese tire work­ers up in arms in Shan­dong prov­ince over a US-based com­pany’s takeover by an In­dian firm, a Chi­nese la­bor ex­pert said on Thurs­day.

Cooper Tire and Rub­ber said last month it would be taken over by Apollo Tyres of In­dia for $2.5 bil­lion to cre­ate the sev­enth-largest tire com­pany in the world. Chi­nese work­ers at Cooper Cheng­shan, a joint ven­ture be­tween Cooper and the Cheng­shan Group, protested the move on July 12, say­ing it would put their jobs at risk. The strike is on­go­ing.

Feng Xil­iang, deputy dean of the school of la­bor economics at Cap­i­tal Univer­sity of Economics and Busi­ness in Bei­jing, said the work­ers’ de­mands and com­plaints are symp­to­matic of to­day’s la­bor en­vi­ron­ment as the global econ­omy de­vel­ops.

He said the re­cent surge in merg­ers and ac­qui­si­tions around the world has thinned out work­forces. He also said to­day’s work­ers are more aware of their la­bor rights.

“Sev­eral strikes ( of this na­ture) were al­ready held at joint ven­tures and in do­mes­tic busi­nesses in China’s eco­nom­i­cally de­vel­oped ar­eas be­tween 2010 and 2011, in­clud­ing the Yangtze River and Pearl River delta ar­eas,” he said.

The Shan­dong strike is the lat­est at a for­eign joint ven­ture. In late June, work­ers in a plant in Bei­jing’s Miyun dis­trict held an Amer­i­can fac­tory ex­ec­u­tive cap­tive in protest of a plan by the ex­ec­u­tive’s US-based med­i­cal sup­ply com­pany to lay off 30 work­ers.

Feng said strikes in China are of­ten trig­gered by fear of lay­offs fol­low­ing M&As and be­cause of the re­cent flurry of M&As, “such strikes will not de­crease”.

Af­ter the takeover was an­nounced, in­vestors ex­pressed con­cern that Apollo Tyres would not be able to re­pay debt ac­quired in the highly lever­aged ac­qui­si­tion, AFP re­ported on Wed­nes­day.

“Apollo does not have suf­fi­cient strength. The $2.5 bil­lion price tag was be­ing funded mostly through bank loans with an­nual in­ter­est of $100 mil­lion to $200 mil­lion,” Yue Chunxue, head of the la­bor union at Cooper Cheng­shan, said in the AFP re­port.

Yue con­firmed on Thurs­day that the strike was on­go­ing. But he said work­ers will not suf­fer loss of their in­comes, as the strike is a kind of move to safe­guard their rights and in­ter­ests.

Work­ers were also wor­ried that cul­tural dif­fer­ences with In­dian bosses could cre­ate con­flicts, he said.

“I def­i­nitely op­pose the takeover,” said Deng Zhi­gang on Thurs­day. Deng is an em­ployee of the com­pany’s mar­ket­ing depart­ment in charge of sales in Liaon­ing prov­ince. “When (Cooper Tire and Rub­ber) joined us, the dif­fer­ent ideas in man­age­ment and the cul­tural dif­fer­ences had an ef­fect on our busi­ness for a long time. I am afraid sim­i­lar prob­lems will come up again af­ter the takeover.”

Dong Zhao­qing, deputy di­rec­tor of the ad­min­is­tra­tive of­fice of Cheng­shan Group, also ex­pressed dis­sat­is­fac­tion with Apollo Tyres, com­plain­ing that the In­dian com­pany has yet to show an “in­ten­tion to ne­go­ti­ate with us”.

Feng said more guide­lines and reg­u­la­tions about the or­ga­ni­za­tion of strikes should be in­tro­duced in China.

“Ra­tio­nal strikes can help work­ers pro­tect their rights and in­ter­ests and solve prob­lems bet­ter. Many de­tails, such as a time limit and des­ig­nated ar­eas dur­ing a strike, as well as an ad­vance no­tice or warn­ing be­fore a strike, are needed,” he said. Con­tact the writ­ers at jinzhu@chi­nadaily.com.cn

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