Wall Street Journal: China Toy Factory Workers Protest Over Unpaid Wages

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

Aug. 8, 2015

BEIJING—The closure of a Chinese toy factory that supplies Mattel Inc. sparked protests this past week involving hundreds of workers demanding unpaid wages, the latest in a spate of labor unrest sparked by plant shutdowns across China’s manufacturing sector.

Workers at Ever Force Toys & Electronics Co., a Hong Kong-owned toy maker in the southern industrial city of Dongguan, said they started gathering Tuesday to demand three months of unpaid wages, totaling some 4.5 million yuan ($725,000), and other benefits owed to about 700 employees.

Their protests lasted until Thursday as local officials sought to defuse the unrest by offering to pay part of the owed salaries, while police broke up the demonstrations by force, workers said.

Ever Force, which supplies Mattel with Power Wheels toy cars and other products, first told employees Aug. 3 that it was shutting down because of insolvency, according to workers, who said they were taken by surprise.

Mattel was informed of the closure on the same day, according to a person with knowledge of the matter. The U.S. toy company expects to incur losses because of the plant’s closure, but has since shifted production to backup manufacturers, the person said.

Efforts to contact Ever Force Group, the Dongguan factory’s Hong Kong-based parent, weren’t successful. Dongguan’s labor bureau didn’t immediately respond to a request for comment.

The protest in Dongguan, part of the Pearl River Delta manufacturing belt in southern Guangdong province, came amid worsening labor unrest in China, which researchers have blamed on a steepening economic slowdown.

The number of labor protests and strikes tracked on the mainland by China Labour Bulletin, a Hong Kong-based watchdog, more than doubled in the April-June quarter from a year earlier, partly fueled by factory closures and wage arrears in the manufacturing sector. The group logged 568 strikes and worker protests in the second quarter, raising this year’s tally to 1,218 incidents as of June, compared with 1,379 incidents recorded for all of last year.

This trend has worried senior government leaders, who in recent months have pushed for greater efforts to foster labor harmony and warned that festering industrial tensions could soon threaten social stability or even weaken the Communist Party’s grip on power.

In the case of Ever Force, workers say their protests were partly fueled by their dissatisfaction with how Dongguan authorities tried to resolve the dispute.

Government officials initially had promised to pay the factory’s roughly 700 employees all of their unpaid wages, before changing their offer to cover only 70% of the owed salaries, said Huang Shiqiang, a 35-year-old supervisor who worked a decade at Ever Force. Further protests prompted officials to revise their offer to pay 90% of owed salaries, while police intervened to break up the protests, injuring a few workers in the process, Mr. Huang added.

Police detained 20 workers and held them for at least a dozen hours before releasing them without charges, according to Duan Anqing, a 35-year-old migrant worker who said he was among those held in custody. Many factory employees decided to accept the revised payment offer after the arrests, according to several workers, including Messrs. Huang and Duan, who also took the offer.

Images purportedly taken of the protest this week, shared on social media by workers, showed hundreds of workers gathered outside Ever Force’s premises, while dozens of police officers looked on. Some images showed workers bleeding.

A police official in Dongguan’s Shipai district, where the factory is located, declined to comment. Efforts to reach the city’s Public Security Bureau weren’t immediately successful.

Mattel first became aware of potential problems a few months earlier when Ever Force began shipping defective toys, according to the person with knowledge of the matter.

The U.S. company continued with the partnership at the time after the factory said it couldn’t survive if it had to take losses on the faulty products and gave assurances that future shipments would meet quality standards, the person said.

Write to Chun Han Wong at chunhan.wong@wsj.com and Laurie Burkitt at laurie.burkitt@wsj.com

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