Chinese athletic shoe maker Yue Yuen hit by factory strike
HONG KONG, March 18 (Reuters) – China’s Yue Yuen Industrial Holdings Ltd, the world’s largest sports shoe manufacturer, said on Wednesday that thousands of workers at a factory in the south of the country were on strike as a result changes in production processes.
About 4,000 to 5,000 employees at Yue Yuen, which supplies shoes for Nike Inc and Adidas AG, were protesting against facilities that produce shoes for international brands, said Jerry Shum, director of investor relations for the based company. in Hong Kong. He did not identify the brands supplied by the factory.
The company was in control and expected it to be resolved within days, Shum said. He said the strike, with workers making up around 2-3 percent of Yue Yuen’s workforce in China, has so far had no impact on Yue Yuen’s production schedule.
“Due to the changes in the economic environment, we have to reorganize part of the production,” Shum said. “As a result, the workers are not very happy to see the change in production… and this has led to some disagreement. “
New York-based China Labor Watch said workers were demanding immediate payment from their housing fund following a decision to merge two factories. Shum declined to confirm if this was the case.
A Nike official in Hong Kong said she was not aware of the strike. Adidas did not immediately respond to a request for comment.
Last year, tens of thousands of workers at Yue Yuen, which has a market value of $ 6.5 billion, called off a strike after the shoe maker pledged to meet some of their demands for better social benefits.
Major manufacturers have shifted some of their production from China to other Asian countries, such as Vietnam and Indonesia, as labor and production costs in the country rise.
Yue Yuen said that the reorganization of its production process was driven by the economic environment and that it was trying to offer more options to cost-sensitive customers.
“If people are concerned about the cost, then they will consider other countries as well. It is motivated by the economic environment which is causing certain changes in China, ”said Shum, without elaborating.
Yue Yuen shares were down 0.8% on Wednesday, compared to a 1% gain in the benchmark Hang Seng. (Reporting by Donny Kwok; Editing by Anne Marie Roantree and Kenneth Maxwell)