Wall Street Journal: Worker Dispute Halts Production at Chinese Electronics Plant

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

25 October 2012

By EVA DOU

TAIPEI—Compal Electronics Inc., a contract manufacturer of personal computers, said a dispute with production-line workers over shifts and wages has halted production since early Thursday at a southwest China plant that supplies Dell Inc. and Lenovo Group Ltd.

It is the latest example of labor unrest in China, where most of the world's computers are manufactured, as employees demand better compensation for production-line work. A riot last month in Taiyuan, northern China, at a factory owned by Hon Hai Precision Industry Co., a major supplier for Apple Inc.,AAPL -0.91% left at least 40 injured, and thousands of police intervened.

Compal's shipments are unlikely to be affected, as production will be relocated to the company's other factories in China, a Compal official who asked not to be named told The Wall Street Journal. The official didn't say when production would resume.

The plant in the southwest China city of Chengdu produces 100,000 personal computers a month, or 2% of Compal's total output, and employs more than 2,000 workers, the official said.

The local government has stepped in, and the dispute is expected to be resolved quickly, the official said, adding that Compal is already compliant with China's labor regulations.

"The dispute was due to an adjustment to the working time for employees, and a difference of opinion in how workers should be compensated," the official said.

Employees who don't work on the production line returned to work late Thursday, although production-line workers hadn't yet returned, the official said.

Dell and Lenovo weren't immediately available for comment.

Foreign companies are finding that the new generation on China's factory floors are increasingly willing to fight for higher wages and better treatment. Plugged into the rest of the world through the Internet and social media, they are less willing to "eat bitterness" than their predecessors, and better at mobilizing.

Strikes and protests have been rising, with the China Labour Bulletin logging an average of 29 such incidents over the first eight months of this year, compared with 11 a month in the same period last year.

Manufacturing wages rose 18.9% last year, according to China's National Bureau of Statistics.

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