Vietnam hit by rare strike at major footwear factory (updated)
31/03/2015 10:54
(Adds details from Pou Chen Corp, paragraphs 8, 9)
By Ho Binh Minh
HANOI, March 31 (Reuters) - Thousands of workers at a major
factory in southern Vietnam went on strike for a fifth day on
Tuesday in protest over social insurance cover, in rare show of
labour unrest in a country positioning itself as a future Asian
manufacturing powerhouse.
Witnesses in the industrialised suburbs of Ho Chi Minh City
said hundreds of workers massed peacefully inside and outside
the factory owned by Pou Yuen Vietnam, a footwear maker for
firms that include Nike Inc NKE.N and Adidas ADSGn.DE and
brands like Lacoste, Converse and Reebok.
Pou Yuen, which employs close to 80,000 workers, is
controlled by Chinese shoemaker Yue Yuen Industrial Holdings Ltd
0551.HK , a subsidiary of Taiwan-listed Pou Chen Corp
9904.TW .
Strikes and protests are rare in communist Vietnam, which
has been tightly controlled by one party for four decades. It is
known for taking decisive action to thwart the kind of labour
and civil unrest that has affected other textile manufacturing
rivals like China and Cambodia.
That has earned Vietnam a reputation as a safe bet for firms
like Gap GPS.N , H&M HMb.ST and Inditex's ITX.MC Zara. Such
companies have helped fuel annual export growth of 15.8 percent
last year in garments, to $20.8 billion, and 21.6 percent in
footwear, to $10.2 billion.
Workers blocked nearby streets on Monday, according to news
websites of some state-run media, which has given the issue only
limited coverage. VN Express reported several nearby factories
closed for security reasons.
The employees are disgruntled about a social insurance law
taking effect from 2016, which restricts the scope of
entitlements for a lump sum payment if they leave.
Pou Chen Corp in Taiwan urged swift resolution to the
dispute and said the issue was about government policy and it
had no authority to intervene beyond facilitating dialogue.
A company representative told Reuters the firm had
temporarily moved some operations to other Vietnamese factories
it ran and the strike "had not caused a large material impact".
City officials said they were trying to settle the dispute.
"The company has given them a day off today and we are
holding dialogue with workers," Nguyen Tran Phuong Tran, deputy
chairwoman of the city's Labour Union, told Reuters by
telephone.
It comes as Vietnam's tries to lure big firms with its cheap
labour, tax breaks and its looming accession to Free Trade
Agreements (FTA) with its biggest export partners.
(Additional reporting by Michael Gold in Taipei, Do Khuong Duy
and Nguyen Huy Kham in Hanoi; Writing by Martin Petty; Editing
by Jeremy Laurence)
((martin.petty@thomsonreuters.com; +84 4 3825 9623))
Keywords: VIETNAM STRIKE/