AFP: Thousands on strike at SKorean footwear plant in Vietnam

HANOI (AFP) — Nearly 14,000 workers at a South Korean footwear company in Vietnam have gone on strike to demand higher salaries, blaming the action on rising consumer prices, state media said Sunday.

The workers of Hwa Seung Vina in southern Dong Nai province stopped work Saturday, asking company leaders to raise their incomes by at least 300,000 dong (18 dollars), said Tuoi Tre daily newspaper.

The management of the company which produces shoes for export, offered to raise workers’ salary by 200,000 dong (12 dollars) but the compromise did not work, the paper said.

Company and provincial labour officials could not be reached for comment Sunday.

Communist Vietnam is now fighting spiralling inflation, with consumer price rises topping 27 percent year-on-year in July. The country last week surprisingly raised petroleum prices by 30 percent.

AFP: Thousands on strike at SKorean footwear plant in Vietnam

Amid woes, some Vietnamese strike, others tough it out

HANOI, June 15 (Reuters) – Hundreds of thousands of factory workers have gone on strike for higher wages but many Vietnamese are taking spiraling inflation and a declining value of their currency on the chin.

Others are calling on survival instincts honed by families through decades of war and a Soviet-style command economy up to the early 1990s by looking after their own patch, hoarding rice and petrol, gold and dollars.

In the one-party ruled Southeast Asian country where dissent is muted and street demonstrations extremely rare, others still take quiet satisfaction from watching the Communist Party leadership grapple with serious macro-economic problems.

“It is a crisis and as one Vietnamese friend of mine told me, ‘sometimes very bad is very good’,” said one Western diplomat.

Overall, foreign donors and governments are optimistic about the long-term potential of economic reforms, despite complaints from the United States and the European Union about corruption, lack of freedom of speech and jailing of political activists.

The ruling party faces one of its biggest challenges with yearly inflation in double-digits for seven consecutive months, hitting 25.2 percent in May.

Imports have soared causing a tripling of the trade deficit, a liquidity crunch has put pressure on the underdeveloped banking system and the fledgling stock market is down 60 percent, the world’s worst performer.

“A dark cloud over the stock market has created a gloomy mood in my company” said a 25-year-old securities broker who requested anonymity for professional reasons.

The official interbank exchange rate of the dong has dropped nearly 5 percent since late March against the dollar. In the highly dollarised economy, rising prices are stinging Vietnam’s 85 million people, most of whom live in rural areas.

Tens of millions live in poverty or just above the poverty line as annual per capita income averages only $835 even as it has been hyped by pundits as the next “Asian Tiger” economy.

“Poor people and the elderly in the countryside are hurting a lot, our government does not provide a proper social security system for times like these,” said Nguyen Van Hoang, a minibus driver whose family lives in the countryside.

Although media is state-controlled and puts a positive spin on most issues, they have reported workers staging 300 strikes nationwide in the first quarter for higher wages — food costs 42 percent more than a year ago and fuel 30 percent more.

Most strikes have been at foreign-owned textile and garment factories, most of them peaceful, but a few turned nasty with punch-ups between workers and police or management personnel.

A worker’s average monthly salary of $60 is not enough to cope with soaring inflation, but that is a common complaint even among those who earn higher salaries in the capital, Hanoi, and Ho Chi Minh City, the largest city with 8 million people.

“My small income increase does not match the rise in prices. Almost everything has been going up: fuel, food, clothes, etc,” said office worker Nguyen Hien Luong.

“I’m trying to save money. I even think of riding a bicycle to go to work.”

City dwellers say they are shopping less at supermarkets and more at cheaper street markets, eating out at restaurants less and buying fewer luxury goods.

They grumble about having to pay in dollars or if they want to use dong, shops that sell imported goods charge black market rates around 18,000 dong per dollar, about nine percent more than the official rate.
The government has prided itself on reducing poverty since the mid-1990s with reforms that shed the planned economy and many subsidies, building credibility with annual growth rates averaging 7.5 percent since 2000.

n the economic downturn, anxieties have crept in about the government’s level of policy experience in coping with external shocks from the global economy.

Rumours and speculation drive a lot of economic decisions in Vietnam, where common complaints by domestic and foreign investors are of endemic corruption and lack of transparency.

Political challenges to the ruling party are not tolerated and the government takes an authoritarian posture on many problems.

It has warned speculators, hoarders and striking workers of “severe punishment” for breaking laws as it clings to the political stability that has attracted many investors.

Prime Minister Nguyen Tan Dung is in the hot seat as head of the government. He appears frequently in public and media talking about inflation, meets foreign financial institutions to discuss policy and travels widely.

“The Government understands what people are going through,” Dung told the one-party National Assembly at the end of May.

He also admitted government shortcomings, but economic and political analysts say that apart from the labour disruptions, they have yet to observe dramatic social and political pressures.

“In Vietnam’s political context, if you stick your head above the parapet, the costs are potentially high of what the security authorities could do,” said Martin Gainsborough, Vietnam specialist at the University of Bristol, England. “However, we as observers should be ever more open to the possibility that unexpected events can happen.” (Editing by Sanjeev Miglani)

Strikes Spread Across Vietnam As Yearly Inflation Tops 25%

A proliferation of labor strikes in Vietnam is dragging foreign manufacturers into the country’s worsening inflation crisis, while Hanoi’s Communist leaders struggle to keep rising prices under control.

[Nguyen Tan Dung]

About 1,000 workers walked off the assembly line at one of Panasonic Communications Vietnam Co.’s four Vietnamese plants over the weekend, demanding higher pay to keep pace with inflation, which in May hit a 13-year high of 25.2% from a year earlier, up from a 14.1% rate in January.

Nguyen Thu Tanh Minh, a public-relations manager for Panasonic, a unit of Matsushita Electric Industrial Co. of Japan, said the strike involves about a quarter of the workers at one of the company’s Hanoi plants. They are seeking a 25% pay increase. Panasonic officials in Vietnam said the company will respond to the workers’ demands on Wednesday.

The sudden strike follows a series of similar worker protests about rising prices over the past few months. The strikes reflect the anger of the tens of thousands of Vietnamese who have left rural farming communities to seek work in the new industrial zones around Hanoi and Ho Chi Minh City, only to see the buying power of their wage packets dwindle amid rising food and fuel costs.

According to government statistics, about 300 strikes took place in the first quarter, up from 103 strikes recorded in the first quarter of last year. That is despite new labor rules that make workers liable to compensate their employers if they walk off the job illegally.

One of the biggest strikes this year involved a Taiwanese-owned factory that makes shoes for Nike Inc. About 21,000 workers went on strike in April, seeking higher wages. The employees returned to work after a week after receiving a 10% pay increase.

Vietnam has seen an influx of foreign companies in recent years, many of them clothing or footwear manufacturers seeking relief from rising labor and business costs in neighboring China. Last year, foreign companies applied to invest $20 billion in Vietnam, a third more than in nearby Thailand, pushing up office rents and other costs.

Foreign-run businesses are still expanding their operations in Vietnam, despite the country’s economic problems. India’s Tata Steel Ltd., for example, signed a memorandum of understanding with the Vietnam Steel Corp. on May 29 to develop a steel-making complex in Ha Tinh province over the next 10 years. Tata Steel said the plant would have an estimated capacity of 4.5 million metric tons a year.

Still soaring inflation rates are rattling financial markets. Stock prices slid 1.5% Monday after falling 55% since the beginning of the year.

The value of the Vietnamese currency, the dong, is also beginning to wilt as investors worry about the size of the country’s current-account deficit, which the central bank predicts will hit a hefty 7.8% of gross domestic product this year. Last week, futures contracts on the dong versus the dollar slumped, indicating that currency traders expected the dong could lose more than one-third of its value against the dollar over the next 12 months. The dong is currently trading at about 16,000 to the dollar.


Thailand’s current-account deficit was 6.5% of GDP in 1997 when Bangkok’s central bank was forced to devalue its currency, triggering, in part, the Asian financial crisis of 1997 and 1998.

Economists worry that Vietnam’s inflation could lead to a broader economic crisis in the country if policy makers in Hanoi don’t handle it correctly. Many commentators point out that other Asian economies have greatly strengthened their finances since the 1990s and are less vulnerable to another round of devaluations prompted by Vietnam’s problems.

“Vietnam is balancing on a beam at present. The situation has not yet deteriorated to a point where a crisis is inevitable, in our view, but we are hardly reassured about the economic and policy direction either,” Credit Suisse said in a research report late last week.

Speaking at a business forum in Hanoi on Monday, Nguyen Dong Tien, deputy central-bank governor, said the government had a package of policies to manage the inflation problem and reduce Vietnam’s current-account deficit. Those measures include requiring banks to deposit more of their funds with the central bank and to slow lending to stock-market investors. The central bank has also increased interest rates — although at 12%, the main policy rate still lags far behind rises in consumer prices.

“The tightening polices are beginning to demonstrate their effectiveness and they are going to be improved further with a view to curbing inflation and controlling the trade deficit,” Mr. Tien said, according to a Reuters report.

Some government advisers privately suggest that Vietnam’s ruling Communist Party should have acted more aggressively and more quickly to tame inflation. They say policy makers were more concerned with ensuring that state enterprises could secure cheap loans to build up their businesses in order to compete with the influx of foreign companies that have entered the Vietnamese market since the country joined the World Trade Organization last year.

1,000 workers go on strike at Panasonic factory in Vietnam

HANOI, Vietnam (AP) – About 1,000 workers at a Panasonic factory in northern Vietnam have gone on strike to demand higher pay to keep pace with the rising cost of living, state media reported Sunday.

The workers at Panasonic Communications Vietnam Co., Ltd. walked off the job Saturday in Hanoi, according to a report on the Dan Tri newspaper’s Web site.

Consumer prices in Vietnam have climbed 25.2 percent in the past year, according to government figures. About 300 strikes have hit companies across the country in the first quarter of the year.

It was unclear how much of a wage increase the Panasonic workers were demanding.

The company has been paying its workers an average monthly salary of 1,050,000 Vietnamese dong (US$66; euro42), 50,000 Vietnamese dong (US$3; euro1.93) higher than the minimum wage required by the government, the Dan Tri report said.

Company officials were not available for comment Sunday.

Panasonic Communications has been operating in Hanoi since 2006. The company produces high-tech electric and electronic products such as phones and optical disk drives for export-AP

1,000 workers go on strike at Panasonic factory in Vietnam

5,000 workers go on strike at shoe factory in northern Vietnam for higher wages

HANOI, Vietnam: More than 5,000 workers have walked off the job at a privately owned footwear company in northern Vietnam and demanded a pay increase to cushion the impact of rising inflation, a company official said Tuesday.

The company recently increased its workers’ salaries 100,000 Vietnamese dong (US$6.30) to an average monthly pay of 800,000 dong (US$50). The new salary is about 38 percent higher than the minimum wage for workers at Vietnamese owned firms, said an official with Sao Vang Ltd. Co., who only identified himself as Hieu, citing policy.

But the workers stopped working Monday to ask for more, he said.

“It is hard to say that they are demanding, given the fact that inflation is skyrocketing,” Hieu said. “This is putting more and more pressure on businesses here.”

Consumer prices in Vietnam are 21.3 percent higher than they were a year ago, according to government figures. A wave of strikes has hit companies across the country as the inflation rate has grown this year.

Sao Vang has been operating in Hai Phong City, about 100 kilometers (63 miles) east of Hanoi, since 1994. It currently employs about 6,000 workers. The company produces shoes for export to Europe and elsewhere in Asia.

Nike contract plant in Vietnam remains closed for fear of violence

HANOI, Vietnam: A Taiwanese-owned factory that makes sneakers for Nike Inc. remained closed Thursday following a two-day strike as union officials worked to convince unsatisfied Vietnamese workers that a fair deal had been reached with the company.

Dozens of union and government officials were sent to talk to workers of the Ching Luh factory to persuade them to accept the terms offered by management amid fears of violence at the plant, said Nguyen Van Thua, an official with the Long An provincial trade union.

It remains unclear when the 21,000 employees will return to the job.

On Tuesday, the company agreed to increase monthly wages by 10 percent, or 100,000 dong (US$6), and provide free lunches to employees in a settlement reached with union officials and worker representatives.

About 17,000 workers at the plant reported for work Wednesday, but a brawl broke out following a spat between a former worker and a security guard, causing the factory to shut down.

Thua said many workers did not agree with the deal, insisting on monthly raises of 200,000 dong (US$12). The plant remained closed for the safety of workers and equipment, as fears rose of further violence, he said.

“One hundred thousand dong is nothing, given that everything is a lot more expensive now,” said a worker that declined to give her name for fear of losing her job. “But I want the job, and I will go back to the factory Monday.”

Some workers distributed leaflets in front of the plant on Thursday calling for others to continue the strike.

Nike said the factory would be closed until management is confident that all workers support the negotiated settlement.

“We hope that the trade union can facilitate a safe return to work for all factory employees based on an agreed-upon settlement,” said Nike’s spokesman, Chris Helzer.

Consumer prices in Vietnam are 19 percent higher than they were a year ago, according to government figures. The skyrocketing inflation has led to a wave of recent nationwide strikes. Hanoi responded in January by increasing the minimum wage foreign-owned companies are required to pay by roughly 13 percent.

Nike said the Ching Luh plant has been operating since 2002. It is one of 10 factories that contact with Nike to produce about 75 million pairs of shoes a year in Vietnam. The Ching Luh plant accounts for about 12 percent of the total.

Nike strike ends in Vietnam, contract factory remains closed after worker brawl

BEN LUC, Vietnam: A two-day strike at a Vietnamese factory that makes Nike sneakers has ended, but the plant remained closed Wednesday after violence erupted when workers began returning to the job, a union official said.

About 17,000 of the Ching Luh plant’s 21,000 employees reported to work Wednesday morning after the labor union and management of the Taiwanese-owned plant reached an agreement to increase monthly wages by 100,000 dong (US$6) amid record-high inflation, said Pham Thi Lap, head of the labor union of southern Long An province in Vietnam’s Mekong Delta, where the plant is located.

But after a brawl broke out following a spat between a former worker and a security guard, police were called in and the plant was closed, Lap said. No one was seriously injured, but several workers were beaten during the melee, she added.

“The workers overwhelmed the police and factory guards,” Lap said. “Things went out of control, and we had to call in more police to restore order.”

The factory that makes sneakers for Nike Inc., will remain closed for the next three days for security concerns, said Nguyen Van Thua, a provincial trade union official.

Company officials declined to comment on the violence.

“We are encouraged by the labor union and the provincial government in helping to find a fair and timely resolution to the current work stoppage,” George Lin, factory general manager said in a statement Wednesday.

Some employees interviewed by AP Television News, who declined to give their names for fear of losing their jobs, said the brawl started when a group of workers who disagreed with the deal began attacking those who came to work.

“Some workers switched off the electricity and they threw chairs at the other workers who tried to switch it on,” one worker said.

The workers asked for a 20 percent bump to their US$59 (€37) average monthly salaries along with better lunches at the company cafeteria. They were given a 10 percent raise and the company agreed to provide free lunches, Lin said in the statement.

Consumer prices in Vietnam are 19 percent higher than they were a year ago, according to government figures. Hanoi responded in January by increasing the minimum wage foreign-owned companies are required to pay by roughly 13 percent.

The Ching Luh plant has been operating since 2002. It is one of 10 factories that contact with Nike to produce sneakers in Vietnam, producing about 75 million pairs of shoes a year. The Ching Luh plant accounts for about 12 percent, Nike spokesman Chris Helzer said.