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Yue Yuen loses almost 60 million in strike

Apparel

Yue Yuen loses almost 60 million in strike

By

Apr 29, 2014

After thousands of workers went on strike earlier this month at Yue Yuen in Dongguan, one of China's

largest sports shoe manufacturers and supplier to international brands like Adidas, Puma, Asics and Nike, the company has now put a figure on strike costs: a whopping 58 million US dollars.

And that may be a conservative estimate, which could climb further as some clients like Adidas for example decided to move some future production away from Yue Yuen. The losses from the strike at its plant in southern China alone come to about 27 million US dollars (including lost profit and additional air-freight costs) plus 31 million US dollars in increased benefits. The workers had not only gone on strike for more pay but also to demand their rights, which is benefits in form of payments for pensions, medical insurance, housing allowances and injury compensation. Though mandatory by law in China, they are hardly ever paid out. Until now.

More than 80 percent of the workers returned to work after China’s human resources ministry ordered Yue Yuen to rectify benefit payments to workers and the shoe manufacturer agreed to provide them with an adjustment to employee benefits as well as an additional monthly living allowance of 230 yuan (almost 37 US dollars).

Yue Yuen also commented on past contributions and confirmed that it would make back payments for contributions owed to the employee-benefit program but did not mention any amount at this point (Labor rights groups estimate this amount to between 100 and 200 million yuan; 16 to 32 million US dollars). The company referred to a further announcement "in due course".