Adidas, Nike Supplier Yue Yuen Says Work Stoppage Ended

Yue Yuen Industrial Holdings Ltd., which makes shoes for clients including Adidas AG and Nike Inc., said employees ended a one-day work stoppage in its factory in the southern Chinese city of Zhuhai.

Workers went on strike July 21 over social welfare-related issues, the company said yesterday.

“Everything is back to normal” as Jerry Shum, a company spokesman, said in an e-mailed reply yesterday. The workers were unhappy about the slower processing of the post payment applications for the social insurance contributions, and some believed in rumors, Shum said.

“At this point all the misunderstanding has been resolved,” said.

This week’s strike is the second work stoppage for the shoemaker this year, after employees in its 45,000 factory campus in Dongguan, southern China, staged a week-long protest in April over social security payments and salaries. The China operations of Wal-Mart Stores Inc., International Business Machines Corp., PepsiCo Inc. have all been idled by labor protests this year as more Chinese workers demand better rights.

Production at Yue Yuen’s Dongguan factory resumed as China’s human resources ministry ordered the company to rectify benefit payments to workers who have demanded more pay and employer contributions to social-security accounts.

The production stoppage in April cost the company about $27 million in direct costs, including lost profits and additional air freight costs, the Hong Kong-based company said in a stock exchange statement on April 25. Settlement for the dispute will raise employee costs by about $31 million this year, Yue Yuen said then.