ANYANG, Henan: Local authorities deployed armed police in Anyang, Henan province, on Friday to stop thousands of angry workers of a steel plant from protesting against the takeover of their factory by a private company.
The Linzhou Steel Corporation (LSC) workers have been demonstrating and patrolling the factory gates along with their supporters for the past four days.
Witnesses said policemen have attempted to break through their lines "several times".
The workers are reportedly holding hostage an official of the local State-owned assets supervision and administration (SASAC), surnamed Dong.
Though the steel plant is in Anyang, authorities in Puyang, which was carved out of Anyang a few years ago, control its operations.
Chen Quanguo, a deputy governor of Henan reached Anyang on Friday to clear the "misgivings" of the workers, a senior city official told China Daily.
The LSC, a 30-year-old State-owned enterprise with 5,122 employees, was sold to a private firm without the workers' consent on July 24, the very day a similar protest erupted in a steel factory in Jilin province where workers lynched the newly appointed general manager.
Inside sources confirmed the LSC was sold for about 64 million yuan ($9.4 million) less than the initial bid at the auction.
Massive layoffs followed the takeover, with the workers getting only 1,090 yuan ($159.5) for each year of service they had put in.
The workers allege that attempts to privatize the factory had continued on for years, and in the end it was sold off for less than its value.
Most of the workers see the privatization as a move to marginalize and "sell them out" to fill the pockets of the rich and the powerful.
In March, more than 1,000 LSC workers tried to resist the privatization by blocking the streets and shutting off the factory for days.
In July, the SASAC official of Puyang responded to the incident in an interview with the People's Daily online, saying the workers' demand for more compensation "has no legal basis".
An LSC veteran who uses the pseudonym "aybls2008", wrote in a post on the popular portal, Tianya.cn: "I've been with the LSC for more than two decades, and all I got was 20,000 yuan and a letter asking me to leave."