Strikes Trip Up, Apple Supplier Wintek

Workers strike at JD warehouse in Shanghai

Two new strikes, one in Shanghai and another in Guangdong, are shining a spotlight once more on the constant challenge of labor unrest in China, following a similar wave of such strikes earlier this year. One of the latest strikes saw thousands of workers go off the job at Wintek (Taipei: 2384), a Taiwanese maker of touch screens and a supplier to gadget giant Apple (Nasdaq: AAPL). The other saw employees walk off the job at a warehouse owned by recently listed e-commerce (Nasdaq: JD) in Shanghai. 

What’s most interesting about these latest strikes is their timing, and also which companies were affected. Strikes are nothing new in China, and have been happening on a fairly regular basis for at least the last 5 or 6 years and probably longer. But most strikes in the past have occurred in the springtime, often when low-skilled workers are returning to their jobs after the long Chinese New Year holiday. That’s definitely not the case this time, though at least one of the new strikes reportedly involved grievances surrounding the recent Mid-Autumn Festival holiday.

The second interesting thing about these latest strikes is that one involved a Chinese company, in this case In nearly all the previous cases, the affected company has been a foreign firm operating China. Chinese companies seem to have avoided such strikes in the past, probably because employees have much lower expectations for those firms and also because local police and officials are usually quick to intervene before such discontent results in an actual strike.

All that said, let’s take a closer look at the latest 2 strikes starting at the most recent one at a plant owned by Taiwanese touch screen maker Wintek. (English article) That strike began on Tuesday at a company plant in the south China city of Dongguan, not far from Hong Kong, and then spread to another plant. At the height of the strike, up to 16,000 employees stopped working.

The workers’ main grievance involved benefits for working on holidays, as apparently many felt the promised benefits were too meager during the recent Mid-Autumn Festival earlier this week. Wintek said the matter had been settled, and the strikes ended on Wednesday and Thursday without affecting overall production.

Meantime, the strike at reportedly occurred at one of the company’s warehouses in the Qingpu district of Shanghai. (Chinese article) E-commerce firms like JD rely heavily on such massive warehouses, as they allow them to quickly deliver goods to customers in some of China’s largest cities, often on the same day as an order is placed.

The reports say that about 160 workers at the Qingpu facility walked off the job from last Friday to Sunday because they were unhappy about a relocation allowance. A statement from JD says that the 2 sides are now communicating, though it’s not completely clear if everyone has returned to work. The company said the action had not affected any deliveries to its customers in the Shanghai area.

The fact that both of these actions took place in September rather than the usual spring months probably reflects a growing assertiveness among low-skilled Chinese-workers, who feel bolder about challenging their employers over unfair treatment. The strike at JD also marks one of the first such actions at a Chinese Internet company, which probably reflects the fact that many such firms have grown quickly and are now major employers. At the end of the day, such actions will probably grow more common as workers become even bolder, major new private employers emerge, and as China’s economy slows further.

Bottom line: Two new strikes at Wintek and are notable for their unusual timing in early fall and involvement of a Chinese company, indicating workers are becoming bolder about demanding fair treatment.

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