Nike Shoemaker Yue Yuen Output Disrupted as 2,000 Workers Strike

Yue Yuen Industrial Holdings Ltd., which makes shoes for Adidas AG and Nike Inc., said production at one of its factories in South China was disrupted as workers upset with organizational changes went on strike.

About 2,000 employees in Dongguan, a manufacturing hub in Guangdong province, were affected, said George Liu, a Hong Kong-based spokesman for the shoemaker.

The strike started on March 17 when the company undertook “personnel adjustments” and re-organizations to “enhance capabilities,” Liu said, without disclosing further details. Yue Yuen is working with labor unions and government officials to resolve the issue, he said, declining to comment when asked if there would be job cuts.

Yue Yuen’s work stoppage follows a labor disruption at fellow shoemaker Stella International Holdings also in Dongguan city last week. Chinese workers, previously viewed by manufacturers as an inexpensive and mostly compliant labor force, have gained increasing awareness of their rights and bargaining power in recent years.

Stella, which makes shoes for brands such as Prada SpA and Alexander Wang Inc., said last week “a few hundred” workers went on strike on March 9.

Yue Yuen, which also operates factories in Vietnam and Indonesia and employed more than 400,000 staff, was also a target of employee activism last year as more than 1,000 workers led to a week-long production stoppage in April over social security payments and salaries.

The strike cost the company $27 million in direct costs, including lost profits and additional air freight costs, Yue Yuen said last year.

Reuters earlier reported on the strike at Yue Yuen.

— With assistance by Liza Lin

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