Guangzhou stainless steel factory shut down as strike enters sixth day

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22 February, 2016

Several hundred workers at Ansteel Lianzhong in Guangzhou have been on strike for six days, protesting wage cuts and moves by the company to force them to resign. The strikers have now effectively closed down the factory, which has a total workforce of around 2,000.

In response, police have sealed off the factory gates and, this morning, officers in riot gear attempted to break up a demonstration of hundreds of workers inside the factory grounds.

Workers stage a protest inside the Ansteel Lianzhong Steel complex on 17 February

The workers claimed that problems at the plant started last year when state-owned steel giant, Ansteel, took a controlling interest in the formerly Taiwanese-owned Lianzhong Stainless Steel Co.

The new management soon began to lay off staff and increase workloads and then in December, the company started to put workers on leave at 80 percent of the Guangzhou statutory minimum wage.

The final straw came on 15 February when the company issued an open letter announcing a new performance-based pay system that would significantly reduce workers’ wages.  To add insult to injury, it added that the company trade union had already accepted the plan on the workers’ behalf.

Several hundred workers mobilized immediately, collecting money via the WeChat Red Envelope system to pay for banners, loud speakers etc. The strike began on 17 February with workers demanding compensation for contract termination and to sign new contracts with Ansteel directly. The strike spread quickly and by the third day they had effectively shut down production. Large numbers of police with riot gear and busses used for mass arrests arrived at the factory and blocked the factory gates.

On the third day of strike, the head of the company union head was sent by management to meet with workers and attempt to persuade them to accept the deal and return to work. The union head offered to return to the old wage system but workers rejected the offer and ignored the union head.

“How can we trust the company now? How do we know they won’t do these things again?” said one worker. Workers were particularly disappointed in the union’s claims to represent them, saying the union was “absolutely useless. There is nothing democratic about it.”

Workers were outraged at the inability of a large state-owned company to abide by its basic legal obligation to compensate laid off workers: “If you want to get rid of your workers, you just pay them compensation – isn’t that normal?” one said.

In its most recent letter to employees, the company offered to halt the wage adjustment program and asked employees to return to work, threatening those who refused with disciplinary action. As of today, the workers intend to continue their action claiming trust between employer and employees had broken down.