By Paul Mozur
BEIJING--Hundreds of workers at a plant run by International
Business Machines Corp. have gone on strike, as the company
prepares to transfer the southern China factory to Lenovo Group
Ltd., under a $2.3 billion deal for IBM's low-end server
business.
Images and video recordings of the strike have spread over
social media since Monday and show large numbers of workers in blue
coats holding signs and shouting from outside the gates of the IBM
Systems Technology Co. Ltd. plant in the city of Shenzhen. The
strike entered its fourth day on Thursday.
A spokeswoman for IBM confirmed the strike, but declined to
offer an explanation of why workers walked out. In a statement IBM
spokeswoman Harriet Ip said employees have a choice of remaining at
the plant after Lenovo takes over under wages comparable to what
they have been receiving or they can leave and receive an
"equitable severance package."
"While it is entirely an individual's choice, we are hoping
employees will decide to remain with ISTC," Ms. Ip said.
According to posts on Sina Corp.'s Weibo social media service
which couldn't be independently confirmed, people who identified
themselves as plant workers said IBM wasn't offering sufficient
severance for those who opt to leave, while those who want to stay
worry wages will fall.
"We are protecting our rights," one Weibo user, who declined to
be identified but said he was a worker at the plant, said via
online chat.
An IBM notice he provided said workers have until March 12 to
decide whether to resign or to stay and become Lenovo employees.
The notice offers a 6,000 yuan ($980) bonus for those who decide to
leave before March 7.
In recent years, a growing number of protests have occurred at
foreign-run plants following large-scale mergers. Concerns cited in
those protests have included layoffs, pay cuts and reduced
severance following the acquisitions, according to labor-rights
groups.
Last summer more than 5,000 Chinese workers employed at Cooper
Chengshan (Shandong) Tire Co. went on strike over its sale to
India's Apollo Tyres Ltd. as part of a $2.5 billion purchase of
Cooper Tire & Rubber, of the U.S.; Workers at the time said
they were concerned about Apollo's ability to repay debts, as well
cultural differences between India and China. The deal later fell
through.
Strikes hit several PepsiCo Inc. plants around China in 2011
after the U.S. snack and soft-drinks company announced China's
Tingyi Holding Corp. would take over its bottling operations in the
country. The Pepsi deal eventually went through after the companies
assured workers their contracts wouldn't change.
Lenovo's takeover of IBM's server unit is designed to help it
expand beyond smartphones and personal computers into the booming
business of selling networking equipment to businesses, analysts
said. The deal is expected to close this year.
As China's economic growth slows and workers become more willing
to organize and stand up to management, the frequency of labor
unrest in China has grown. According to data compiled by Hong
Kong-based rights group China Labor Bulletin, there were a total of
656 labor incidents in 2013 compared with 382 in 2012. Over the
same period, China's economic growth has slowed while demands for
higher wages have intensified.
Though the frequency of unrest over takeovers has been growing,
labor groups say that in many cases the problems are often
avoidable. "The main problem is that management simply does not
explain to the workers what is going on. They just announce the
takeover and make a 'take it or leave it' offer," said Geoff
Crothall, a spokesman for China Labor Bulletin.
Write to Paul Mozur at paul.mozur@wsj.com
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