CHINA> Regional
Steel workers protesting against takeover
Updated: 2009-08-15 16:06

ZHENGZHOU: Hundreds of steel workers are protesting against the purchase of their plant by a private company in Henan Province.

Workers of the Linzhou Steel Corporation (LSC) have gathered outside the factory, pressing for a suspension of the purchase and demanding higher compensation and the resolution of issues concerning benefits and unpaid wages during the plant's restructuring, witnesses said.

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Witnesses said police in Linzhou City, which comes under the administration of Anyang City, were trying to disperse the crowds.

It followed a mass protest that began on Wednesday at the site and ended at 3 am Saturday, said Liu Haiying, director with the publicity department of Linzhuo.

The workers allegedly held an official of the local state-owned assets supervision and administration (SASAC) branch in a room on Wednesday.

The state-owned LSC, established in the 1970s, has more than 3,000 employees.

Though the steel plant is in Anyang City, authorities in Puyang, which was formed from part of Anyang, administer its operations.

Restructuring of the plant along commercial lines began in 2008. However, employees had launched a number of protests since then demanding unpaid salaries or resolution of administrative problems.

The plant was sold to an unnamed private iron and steel company in an auction last month, triggering mass demonstration as workers demanded for higher compensation for possible layoffs.

A mediation team, comprising party and government officials, suspended the takeover deal after negotiations with workers and promised to listen to their opinions on LSC's future reform.

However, the buying company had insisted the deal was conducted legally and should be fulfilled,  said Liu.

China Daily on Saturday reported the private firm purchased LSC on July 24 for less than the initial bid at the auction.

Laid-off workers could only get 1,090 yuan (159.5 U.S. dollars) for each year of service they had put in, it said.

The English-language daily said thousands of angry workers had taken to the streets since Wednesday, complaining that the privatization was a move to marginalize and "sell them out" to fill the pockets of "the rich and the powerful."

The newspaper said armed police were deployed on Friday to disperse the crowds.
Liu declined to comment on the newspaper reports.

The auction was on the same day as a  protest erupted at a steel factory in the northeastern province of Jilin, where workers beat the newly appointed general manager to death.

Chen Guojun, general manager of state-owned Tonghua Iron and Steel Co. Ltd., was killed during a protest against a proposed merger by about 1,000 workers on July 24.

Chen was appointed by Beijing-based Jianlong Heavy Machinery Group, the company planning to buy Tonghua.

Workers feared wage cuts and layoffs if Jianlong, one of the largest private steelmakers in China, took control of Tonghua by increasing its stake in the plant to 65 percent from 36 percent.

The incident forced Jianlong to terminate its merger plans and the leadership of Tonghua to reshuffle.