Shandong workers strike over Indian takeover of US tyre firm

PUBLISHED : Wednesday, 31 July, 2013, 3:11pm
UPDATED : Thursday, 01 August, 2013, 3:52am
 

Nearly 5,000 Chinese workers at a Sino-US joint venture tyre manufacturer are on strike in protest at the American parent company’s US$2.5 billion takeover by an Indian firm, a union leader said on Wednesday.

Cooper Tire and Rubber announced last month that it would be taken over by Apollo Tyres of India, making the combined group the seventh-largest such firm in the world.

But thousands of staff at Cooper Chengshan, a joint venture in the eastern province of Shandong, have walked out in protest.

They say the takeover cost could endanger their jobs, and express concern about cultural problems with future Indian bosses.

Their union wants to block the transaction, which saw Cooper shares leap on the New York stock exchange.

In the future because of cultural differences there will be difficulties faced in adapting to management
Yue Chunxue, Cooper Chengshan labour union director

Yue Chunxue, director of the Cooper Chengshan union branch, accepted that the ambitious demand might not be achievable.

“But at least we can express our unease and demands and we hope we can draw the support of the media to successfully block this deal,” he said.

“If we succeed, we will be very happy,” Yue added. “If we fail, we hope at least we can negotiate with them and win more benefits and safeguards.”

Employees have become increasingly vocal in China, with numerous labour disputes occurring in recent years. But the cause of the Cooper Chengshan strike is unusual, with protests normally focusing on pay and working conditions.

It is the latest incident to hit a foreign joint venture after Chinese workers held an American factory executive hostage for nearly a week in late June over a plan by his US-based medical supply company to lay off 30 workers.

The strike began on July 13, Yue said, because workers were concerned Apollo Tyres will be unable to repay debt taken on in the highly leveraged acquisition, so that their interests could be at risk.

“We oppose this purchase, first of all because Apollo does not have sufficient strength,” he said, adding the US$2.5 billion cost was mostly being funded through bank loans with annual interest of US$100 million-US$200 million.

As a result worker wages and benefits could not be guaranteed after the purchase, Yue said.

He also expressed worries about potential conflicts with new Indian bosses.

“In the future because of cultural differences there will be difficulties faced in adapting to management,” he said. “We are very concerned about this point.”

The dispute comes as China and India have vowed to increase trade. Premier Li Keqiang visited India in May and promised to open China’s market wider to India and forge a “dynamic trade balance” to deepen economic ties and ease political tensions.

Cooper holds 65 per cent of the joint venture while China’s Chengshan Group has the remainder.

“I cannot imagine what the company will become after it is taken over by the Indian company,” Cooper Chengshan worker Ma Rufu said, the state-run Xinhua news agency reported on Tuesday.

Zhang Huaqian, another employee, said: “We shall fight to the end with anyone who allows us to lose our jobs.”

Share

 

Send to a friend

To forward this article using your default email client (e.g. Outlook), click here.

Enter multiple addresses separated by commas(,)

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive