Production resumes after rare factory strike in Vietnam
02/04/2015 06:38
By Ho Binh Minh
HANOI, April 2 (Reuters) - Production resumed at a major
footwear factory in Vietnam on Thursday after a rare six-day
strike in a country aggressively courting investment for one of
Asia's fastest-growing manufacturing centres.
Pou Yuen Vietnam, which employs 80,000 workers, makes
footwear for brands including Nike Inc NKE.N and Adidas
ADSGn.DE , Lacoste, Converse and Reebok. The striking employees
had been disgruntled about a social insurance law that goes into
effect from 2016, which restricts the scope of entitlements for
a lump sum payment if they leave.
Labour unrest could hurt Vietnam's bid to become a
manufacturing heavyweight, especially in textiles and
electronics. Hanoi hopes the country's low labour costs and a
slew of free trade pacts nearing conclusion will prompt foreign
investment to surge.
"Workers have returned to work today," Nguyen Tran Phuong
Tran, deputy chairwoman of the Ho Chi Minh City Labour Union,
told Reuters.
The workers had calmed down after seeing a television news
report that the government had guaranteed all social insurance
policies would stay unchanged until year-end, Tran said.
State-run VTV said the government would seek amendments so
employees could choose to take the lump sum payment right after
they leave, or get paid in retirement.
Witnesses in the industrialised suburbs of Ho Chi Minh City
had said the strike was peaceful, with hundreds of workers
massing inside and outside the factory.
Pou Yuen is controlled by Chinese shoemaker Yue Yuen
Industrial Holdings Ltd 0551.HK , a subsidiary of Taiwan-listed
Pou Chen Corp 9904.TW . A Pou Chen representative has said the
strike "had not caused a large material impact". ID:nL3N0WX3FM
Strikes and protests are rare in communist Vietnam, which
has been run by one party for four decades and has dealt swiftly
to stem the sort of labour and civil unrest that has affected
other textile manufacturing rivals like China and Cambodia.
Vietnam produces a tenth of the world's shoes and business
from brands like H&M HMb.ST and Inditex's ITX.MC Zara helped
its 2014 garment exports grow 15.8 percent to $20.8 billion,
while footwear shipments grew 21.6 percent to $10.2 billion.
The country has been committed to keeping a stable
investment and operating environment, but problems could still
erupt in the absence of proper mechanisms to air grievances,
said Asian analyst Firat Unlu at UK-based Verisk Maplecroft.
"As a result, 'wildcat' industrial actions will continue to
expose Vietnam's important manufacturing sector to the risk of
disruption to business operations and supply chains," Unlu said.
(Additional reporting by Martin Petty; Editing by Tom Hogue)
((ho.minh@thomsonreuters.com; +844 3825 9623; Reuters
Messaging: ho.minh.thomsonreuters.com@reuters.net;))
Keywords: VIETNAM STRIKE/