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October 2012, Week 2

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Mon, 8 Oct 2012 21:49:26 -0400
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More Strikes in China, South Africa and India: 3
Stories

South Africa State Workers Join Strike Bandwagon 
By Agnieszka Flak and Sherilee Lakmidas 
Reuters
JOHANNESBURG
October 8, 2012

http://www.reuters.com/article/2012/10/08/us-safrica-strikes-idUSBRE8970OF20121008

(Reuters) - South Africa's local government workers'
union said on Monday it would launch a strike over pay
in the next few days, the first sign of a wave of labor
unrest in Africa's biggest economy spreading from the
mines into the public sector.

Since August, close to 100,000 workers, including
75,000 in the mining sector, have downed tools in often
illegal and violent protests that look likely to hit
growth this year and undermine the government's efforts
to cut its budget deficit.

Finance Minister Pravin Gordhan has promised to reduce
the deficit from the 4.6 percent of GDP forecast for
this financial year. Any public sector wage increase
would make that more difficult.

"The union is mobilizing towards a national protest,
which would begin as soon as this week," South African
Municipal Workers Union (SAMWU) spokesman Tahir Sema
said.

A majority of SAMWU's 190,000 members are expected to
join the strike for "market-related salaries" which may
last for one day or drag on indefinitely, Sema said.

The strikes, which started in the platinum industry and
spread to other mining companies and beyond, have
raised questions about President Jacob Zuma's
leadership and tarnished South Africa's reputation
among foreign investors.

The rand fell to a 3-1/2 year low against the dollar on
Monday, while the cost of insuring South African debt
against default increased, reflecting worsening
investor sentiment toward local assets.

"International investors are really quite concerned
around South Africa," said Mohammed Nalla, an analyst
at Nedbank Capital in Johannesburg. "Structurally and
fundamentally, the outlook on the rand is
deteriorating."

Moody's cut South Africa's government bond rating last
month, citing the government's difficulty in keeping up
with economic challenges and widening strikes.

ELAND ON STRIKE

Wildcat strikes have already shut down large parts of
the mining industry in the world's top platinum
producer and a major supplier of gold, pushing prices
of precious metals higher.

Xstrata is the latest victim, with workers at its Eland
platinum mine walking out on Friday.

The mine is expected to produce 176,000 ounces of
platinum this year, compared with forecast production
nationwide of 4.9 million ounces of the precious metal
used in jewellery and vehicle catalytic converters.

Anglo American Platinum (Amplats) fired 12,000 wildcat
strikers on Friday, a high-stakes attempt by the
world's top producer to squash illegal stoppages that
have hit output at seven of its mines.

The dismissed workers were defiant and threatened a
repeat of the showdown with security forces at rival
Lonmin's Marikana mine that led to the police killing
of 34 miners on August 16, the bloodiest such incident
since the end of apartheid in 1994.

"Those who are dismissed will make sure that there will
be no operations operating and that will cause a
massacre just like at Marikana," said one worker
representative, who asked not to be named.

Other affected mining firms include Kumba Iron Ore,
which was forced to declare "force majeure" to free
itself from supply contracts after losing 120,000
metric tons of output per day from its giant Sishen
mine.

AngloGold Ashanti, the world's third-largest bullion
producer, warned that a prolonged strike could lead to
the closure of marginal shafts and job losses, but said
it was not considering mass sackings.

A strike by more than 20,000 truck drivers entered its
third week on Monday, hitting logistics companies and
leading to filling stations running out of some grades
of fuel. Wage talks with employers were expected to
resume on Tuesday.

The main transport union, SATAWU, said it was gearing
up for a one-day rail and port worker strike on October
15, which could hit exports of coal and other minerals.

(Additional reporting by David Dolan and Stella
Mapenzauswa; Editing by Ed Cropley and Giles Elgood)


(2)
Foxconn Workers Go on Second Strike in Two Weeks Over
Strict Apple Quality Demands 
Bloomberg News 
October 8, 2012

http://business.financialpost.com/2012/10/08/foxconn-workers-go-on-second-strike-in-two-weeks-over-strict-apple-quality-demands/

Foxconn Technology Group, the assembler of Apple Inc.
iPhones, had to stop production for the second time in
as many weeks after factory-line workers at one of its
plants protested against increased pressure.

Foxconn employs more than 1 million workers in China
and has suffered in the past three years from suicides,
riots and strikes. To improve working conditions,
Chairman Terry Gou raised pay and allowed inspections
by outside observers. The employees, who work as many
as 12 hours a day, say the difficulties of meeting
Apple's demands for quality and abuse from guards set
off the latest incidents.

One of the company's factories in Zhengzhou, China,
lost two shifts on Oct. 5 after workers became
frustrated trying to prevent scratching on the casings
of the iPhone 5, according to two people familiar with
the matter. A dispute occurred between the production
and quality teams at the factory, the company said.
Some 3,000 to 4,000 people who walked off the job at
the plant, have since returned to work, according to
advocacy group China Labor Watch.

"What happens in Foxconn's factories shows that it
needs to improve working conditions and its handling of
worker relations," said Wang Xiangqian, former
professor at the China Institute of Industrial
Relations who helps the government coordinate labor
relations. "Foxconn may have put more focus on
efficiency and discipline, which is not wrong, and may
have overlooked employees' feelings as human beings."

"Overly Strict"

Shares of Foxconn flagship Hon Hai Precision Industry
Co. fell 1.9% to NT$88.70 in Taipei today, trimming the
year- to-date gain to 18%. Apple shares fell 1.3% to
499 euros in German trading.

Employees were made to work through a holiday week and
subject to "overly strict" product-quality demands
without adequate training, China Labor Watch said in a
press release dated Oct. 5. The walkout was the result
of demands placed by Apple on its manufacturer to
improve the quality of the iPhone 5 after customers
complained that the company's latest handset had
scratches, it said.

Steve Dowling, a spokesman for Apple, declined to
comment on the stoppages at the Zhengzhou plant.
Foxconn confirmed incidents occurred Oct. 1 and Oct. 2,
and declined to comment on the events Oct. 5.

"These were isolated incidents and were immediately
addressed and measures taken, including providing
additional staff for the lines in question," the
company said in an e- mailed statement about the
earlier events.

Last month, a brawl involving 2,000 workers at a
Foxconn plant in northern China's Taiyuan last month
halted production. The fracas left more than 40
hospitalized and brought security teams wearing riot
helmets and wielding plastic shields into the Taiyuan
plant, which employs 79,000 people.

Designed in California

Cupertino, California-based Apple designs its products
in the U.S. and relies on Foxconn to manufacture them
in mass and on time. Apple, the world's most valuable
company, sold 5 million iPhone 5 models in its first
three days on sale last month. The pressure to deliver
is felt by the workers.

"Every job is tagged to time, there are targets on how
many things must be completed within an hour," said Xie
Xiaogang, 22, who worked at Foxconn's Shenzhen plant
and was transferred to Taiyuan in June this year. "You
don't have much time to relax. In this environment,
many people cannot take it."

That entails a steady turnover of workers who need to
be replaced. The requirements to be a Foxconn worker
are minimal, said a recruiter lingering outside the
Taiyuan facility's gates to coax passers-by and people
alighting at the bus stop to sign up for employment.
The minimum age requirement is 16, good health and some
secondary school education, according to Hao Yaya, a
22-year-old recruiter who has been on the job for a
year.

"Blind Eye"

"We're looking for people willing to work," he said.
With some workers leaving after a day's experience,
turnover rates are high and that necessitates constant
recruitment, Hao said. There are signs seeking workers
at various shop fronts near the Taiyuan factory, and
fliers are stuck on lamp posts around the area to
entice people to work at Foxconn. Advertisement

Foxconn has also improved the working conditions of its
employees after at least 10 suicides in 2010.

Apple Chief Executive Officer Tim Cook brought his
company into the Washington-based Fair Labor
Association in January, leading to the inspections,
after the suicides highlighted conditions at the
supplier. Cook has pledged not to turn a "blind eye" to
problems in a supply chain that includes competitor
Samsung Electronics Co. The group's other members
include Nestle SA and Nike Inc.

Foxconn's Measures

In August, the FLA said Foxconn had cut working hours
and improved safety at a faster pace than scheduled.
The changes are among 284 made by Foxconn this year
after audits at three plants of the Taiwan-based
company logged more than 50 breaches of Chinese
regulations, the group said.

Foxconn is ahead of its 15-month schedule for upgrading
conditions and meeting FLA mandates, with 76 more items
due for completion by July 1, the group said.

"Ever since the suicides at the Shenzhen plant threw
the spotlight on that facility, Foxconn has done a lot
of effort to improve the situation there," said
Geoffrey Crothall, a director at rights group China
Labor Bulletin. "Shenzhen is very much a flagship
facility, yet they're simply recreating the old
management style and problems in other places, such as
Taiyuan, where workers are required simply to obey
their managers without question."

Workers in Taiyuan say they live in crowded
dormitories, some without air conditioning, there are
not enough face masks on the assembly line to protect
against fumes and they have very strict supervisors.

No Freedom

"We don't have much freedom, we can't come and go as we
like, even if we have done all our work," said Zhang
Penghui, 26, who has worked at the Taiyuan plant for
four months. "The rules don't seem reasonable. The top
management might have the right idea, but by the time
it comes down to our supervisors, things have changed."

The workers also generally earn less than they would at
auto manufacturers. The base salary at Foxconn in
Taiyuan is about 1,800 yuan ($285) per month, with
workers able to almost double that amount through
overtime work and bonuses, according to Hao.

In contrast, BYD Co., the Chinese carmaker backed by
Warren Buffett, pays its 69,000 employees an average of
2,366 yuan a month, according to its latest annual
report. At Guangzhou Automobile Group Co. the figure is
2,298 yuan, according to its annual report.

Among the 120,924 job openings at automakers in China,
58 percent offered a monthly salary of 2,000 yuan to
4,000 yuan, with almost half of those fetching between
3,000 and 4,000 yuan a month, according to job592.com,
a recruiting website.

Automotive Factories

"Qualifications to work at auto factories are higher
than that at Foxconn in general and that's reflected in
auto factory workers' compensation," said Johnny Wong,
an analyst at Yuanta Securities Co. in Hong Kong.
"Assembly workers at Foxconn are doing the exactly same
kind of movement every second, while their counterparts
at auto assemblies do more complicated work and enjoy
more freedom."

The higher pay does not buy carmakers complete labour
peace. Honda Motor Co. closed two plants in Guangzhou,
Guangdong province, in May 2010. It also shut factories
in Guangzhou and Wuhan, Hubei province, on May 26 after
1,850 workers at a parts- making unit went on strike to
seek higher wages.

Foxconn margins place constraints on wage increases.
Hon Hai had an operating margin of 1.1 percent in the
year ended December, according to data compiled by
Bloomberg. In contrast, Apple had an operating margin
of 31 percent in the fiscal year ended September 2011.

"These strikes might send a signal to Apple that it has
to set aside a bigger portion of its profit to
satisfying these assembly plant workers," said Daniel
Chang, an analyst with Macquarie Securities Ltd. in
Taipei. "Apple needs Foxconn as it's the only company
out there that has the capacity and ability to amass
such a big number of workers to do assembling work. For
Apple, Foxconn is pretty much irreplaceable."


(3)
Hyundai Operations Hit as TVS Logistics Workers Go On
Strike 
By R. Balaji 
The Hindu Business Line 
October 8, 2012

http://www.thehindubusinessline.com/companies/article3976888.ece?homepage=true

Logistics operations and production at Hyundai Motor
India's car plant were hit following a strike by
workers of TVS Logistics Services, which handles the
car manufacturer's logistics, according to union
sources.

TVS Logistics' workers in the 'Hyundai project' as they
are referred to, struck work today demanding a wage
hike and reinstatement of workers who had been
dismissed or suspended.

The workers have sought the support of the General
Workers' Union of the CITU, and Hyundai Motor India
Employees Union, representing the permanent workers of
Hyundai Motor, which has expressed its support.

Over 1,300 workers in TVS Logistics at the car factory
handle forklift operations, production line feeding,
tow truck operations, data entry and welding. 'Illegal
strike'

An official spokesperson in TVS Logistics said,
"Today's protest by a group of employees is illegal and
totally unjustified." The matter is before the Tamil
Nadu Labour Department, "hence we will not be in a
position to comment on the issue at this point of
time." Production Hit

R. Sridhar, General Secretary, Hyundai Motor India
Employees Union, said as key operations were hit,
production has slowed down at the car plant. The
Hyundai union workers have boycotted lunch and are "not
co-operating" in production. The HMIEU will consider
more active participation in the agitation if the issue
is not resolved fast.

A statement from Hyundai Motor India said it did not
suffer any production loss because of the strike at TVS
Logistics. None of the permanent manpower at Hyundai
was involved in any form of agitation at the plant.
Conciliation

A few hundred TVS Logistics workers gathered at the
labour office at Irrungattukottai industrial estate,
where the factory is located, and conciliation talks
went on through the day.

Union representatives said they were carrying out
operations that were integral to the production process
but were being paid a maximum of Rs 6,500. They said
they were demanding a wage of about Rs 10,000 to Rs
13,000.

They had made their demands on September 4, and had
announced that they would go on strike in a fortnight
if the demands are not discussed.

Hyundai Motor has had its apprehensions on the impact a
strike in TVS Logistics would have on it.

In August, it sought an injunction from the Madras High
Court to prevent CITU and TVS Logistics' employees from
demonstrating inside its factory. It said any
disruption in the factory, which makes 6.3 lakh cars a
year, could mean a daily production loss of over 2,100
cars involving a total turnover of Rs 63 crore.

The total investment in the facility is about Rs 9,000
crore with an annual turnover of Rs 20,000 crore. 

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