Wed, July 29, 2009
China > Mainland

Finger-pointing in steel mill death

2009-07-29 01:14:59 GMT2009-07-29 09:14:59 (Beijing Time)  Global Times

Plenty of blame is being passed around involving the death of a steel mill executive late last week during unrest triggered by threats of job cuts.

Fingers are being pointed at an alleged lack of involvement by trade unions, interest conflicts and bad communication between employers and employees.

Production and the status quo returned Monday – three days after the death – at the Tonghua Iron and Steel Group (TISG) after top provincial officials demanded peaceful settlement of the incident.

Chen Guojun, an executive of the privately owned Jianlong Steel Holding Company, was beaten to death Friday as thousands of workers at the State-owned TISG in China's industrial heartland, Jilin Province, were outraged at the news that Jianlong was mulling a takeover offer.

Zhang Zhidong, spokesman of the TISG, denied foreign reports that as many as 30,000 protesters were involved in the protest. “We have only 13,000 on the payroll,” he said.

Xinhua put the number of protesters at 1,000.

A work group organized by the provincial government to investigate the incident said Chen was dispatched by Jianlong to conduct a merger discussion to take a controlling share in the TISG.

A native of Tangshan, Hebei Province, Chen, who was in his 40s, served as the vice president of Jianlong. Chen's body was transferred to his hometown by family members, reports said.

Jianlong's president and vice president went to meet with Chen's family, reports said. But no further details were available, including likely compensation.

Zhang Wangcheng, a professor of the China Labor Studies Center at Beijing Normal University, told the Global Times that the mayhem would have been avoided if the labor union of the steel mill had fully performed its duty.

Wang Xidong, vice director of the State-owned Assets Supervision and Administration Commission (SASAC) in Jilin, spoke to the press Monday, claiming the deadly brawl at Tonghua stemmed from false rumors spread “by former employees with bad intentions.”

After the incident, the SASAC immediately issued two circulars to Tonggang employees and their family members, announcing the scrapping of the takeover by Jianlong.

Jianlong made the decision to terminate the deal in hopes of preventing the brawl further exacerbating and to rescue Chen from employees who held him hostage, the Jinlin SASAC told the 21st Century Business Herald newspaper.

Meanwhile, a report on the China Business Journal website said yesterday that thousands of workers gathered Monday morning in front of Jianlong, as hundreds of police maintained order. The workers were from a mineral firm affiliated with TISG. They were separated from the parent company after Jianlong took over 49 percent of the group's shares in 2005.

A worker, who requested anonymity, told the paper that most of the workers earn a monthly salary of about 300 to 500 yuan ($43.92 to $73.20), compared with 2,500 yuan ($366) per month before Jianlong's first takeover bid.

“Jianlong has always called for payroll cuts to improve efficiency,” another worker, named Sun Dejun, told Xinhua. “Workers have been kept worrying about their job security.”

An official with the Tonghua Publicity Department, who gave only his surname, Li, told the Global Times, “We have no new details on the incident, since Tonghua is owned by Jilin SASAC, and all information is released by the SASAC.”

Demonstrations over employee's rights have been common in China in recent years, as people became outraged over corruption or threatened with layoffs, experts said.

“The reason why most of China's labor unions are marginalized is that all the companies are profit-oriented, but labor unions aren't capable of making profits,” Zhang said. “To be honest, it is a long way to go to strengthen the influence of the labor unions. The law to protect workers must be enforced.”

Wang Dayong, secretary-general of Hebei Province's metallurgical industry association, said the brawl reflected interest conflicts among varied groups during the process of private enterprises acquiring stakes in SOEs.

In this case, the interests of different groups have been reshuffled due to a transfer of property rights, with concept conflicts stemming from different management and cultures, Wang said, noting that the two companies are from Jilin and Beijing.

A lack of effective communication between the TISG and its employees was also blamed for Chen's death.

Zhou Dongfei, a Web user, wrote on that the incident had tested the theory that “if people can solve a problem efficiently through a proper channel, no one else will prefer to create an uncontrollable situation in search of the answers to the problem.”

An opinion piece carried by the website also said a lack of communication and mutual trust was the reason behind Chen's death, and it urged relevant departments to launch a mechanism to fully gather worker feedback and opinions in the process of enterprise restructuring and reorganization.

Chen's death has prompted TISG Chairman An Fengcheng and other senior executives to summit their resignation letters, reports said.

An Baijie , Liang Chen and Zhou Min contributed to the story

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