Blog: Strike does the trick at Vietnam plant
Joe Ayling | 7 April 2008
A 20,000 worker strike at a Vietnamese footwear plant that supplies Nike grabbed the just-style headlines last week, after prolonged protests and violent incidents resulted in temporary closure.
The Taiwanese-owned Ching Luh plant, in southern Long An province, is just one of many Nike suppliers in Southeast Asia and China. Nevertheless, Nike released two statements during the week encouraging a resolution between trade unions and management at the plant, which is one of the company's largest footwear suppliers in Vietnam.
The strike began on Monday (31 March), when 20,000 employees aborted work and campaigned for a VND200,000 (US$12.4) increase to their VND930,000 monthly pay.
Confusion reigned by Wednesday, as a VND100,000 monthly pay rise offered by management resulted in a mixed response. In the background were reports of violent scuffles breaking out both between workers and the authorities, and amongst workers themselves as some attempted a return to work.
The plant remained closed on Friday, pending a re-opening this morning, but the strikes fizzled out as negotiations continued. Although workers also lobbied for better working conditions and an improved lunch offering, it was cash that was key.
With a week lost in production, it was an expensive lesson for the plant's owners by this point, and one that other manufacturers will have to learn from next time around. Higher living costs are currently an issue for all Vietnamese people and Nike will be hoping that workers at its other 35 contracted factories there do not have similar plans.
It is worth noting that Ching Luh's workers were earning a salary above the country's minimum wage even before the pay rise, so it is clear that rising inflation could give rise to more strikes unless the Vietnamese government steps in fast.
Its country is making huge strides in the footwear sector, with exports up 11.2% to US$3.993bn during 2007, compared to 2006, but such growth brings more hurdles to clear - as Ching Luh's management found out to their cost last week.
By Joe Ayling, news editor
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