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Workers mass at Shanghai factory in latest unrest

Workers mass at Shanghai factory in latest unrest

December 2nd, 2011 by ELAINE KURTENBACH, AP Business Writers in News

SHANGHAI (AP) - Hundreds of laid-off workers massed Friday outside a Shanghai factory of a Singaporean supplier to major consumer electronics companies such as Motorola and HP, in the latest of a spate of unrest as manufacturers struggle with higher costs and slowing exports.

Reports of recent strikes at factories and other major employers show the increased pressure on China's manufacturers and workers amid weak demand in Europe and the U.S. that comes on top of surging costs for labor and materials. The country's manufacturing contracted in November for the first time in nearly three years, according to a survey released Thursday.

A nervous Beijing has begun reversing a two-year effort to cool the world's second-biggest economy, seeking to counter slowdowns in factory production and property that are dragging growth lower and spurring unrest.

Some of the 300-400 workers at the factory gate of Hi-P International in the eastern industrial suburbs of Shanghai said it was their third day of protesting over mass layoffs due to the company's decision to relocate some manufacturing.

They said they were seeking more information, and improved terms for themselves.

"We all work for this company, and now if the company is going to move, they owe us an explanation. So we are waiting for a solution," said Chang Yan, a woman in her mid-20s who like most of the others was wearing a blue factory uniform embossed with a red Hi-P logo.

The workers also accused the factory of violating labor standards.

"Sometimes, they ask us to work 18 or 19 hours in a day. Sometimes the overtime is even longer than a normal 8-hour work day," said Tao Yong, a worker in his mid-30s.

Police in vans and unmarked cars watched but did not intervene. One worker showed bruises he said were from an earlier beating by police.

Company officials contacted by phone in Shanghai and Singapore refused comment on the protest. Shanghai city government and police also did not immediately respond to inquiries about the strike or the workers' claims of injuries from scuffles with police.

Reflecting the tougher times for manufacturers, Hi-P International's net profit margin plunged 80 percent from a year earlier in third quarter to 2.1 percent from 11.6 percent - mainly due to higher costs. Net profit in July-September fell 42 percent to 6.5 million Singapore dollars ($5.1 million) from a year earlier, according to its latest financial report.

The company, founded in 1980 as a tooling factory, said its third-quarter revenue rose 34 percent, but so did costs for materials and taxes.

The New York-based group China Labor Watch said Hi-P was shifting some of its production to the nearby city of Suzhou and had not paid the legally required amount of compensation to workers, who were laid off without notice.

According to its website, Hi-P International is a contract manufacturer for the wireless telecommunications, consumer electronics and computing and automotive industries, with two-dozen factories and about 18,000 employees.

Hi-P has factories in five other Chinese cities besides Shanghai and Suzhou. Motorola and other major electronics companies are among its customers.