On April 17, 2009, more than 7,000 workers went on strike at a Taiwanese-owned factory in Dongguan, China. Strikes in this southern Chinese city, in the heart of heavily industrialized Guangdong province, have become increasingly common in recent years. The global slowdown in manufacturing and the resulting layoffs have only made the situation more volatile. In this particular strike, workers were protesting against Wintek, one of Apple’s major suppliers. The workers accused the company of requiring them to sign agreements accepting overtime wages below the legally required level. Wintek reportedly fired 19 of the striking workers, prompting an onslaught of negative publicity in the media.
Wintek has been facing similar problems at its manufacturing facility in Taiwan, where it has been accused of unfairly terminating nearly 700 workers in late 2008. Media organizations, unions and labor rights organizations in both Taiwan and mainland China have brought the situation to the public’s attention and have put pressure on the company to meet the workers’ demands and comply with labor regulations.
What is most notable for foreign companies regarding the Wintek case, however, is the negative attention drawn to Apple over the controversy. Apple has been pressured to reconsider its relationships with its suppliers or force them to change their policies. The company faced a similar public relations crisis in 2006, when another of its suppliers, Foxconn, was accused of mistreating and underpaying its workers in China. Although not legally responsible for Foxconn’s practices, Apple initiated a private investigation into the matter and ultimately determined that Foxconn had been violating China’s labor laws. It is yet to be seen how Apple will handle this latest scandal involving Wintek.
Foreign managers of companies that are doing business in the region should be aware of the risks of associating with suppliers or JV partners whose labor practices may come into question. It is important for HR Managers of these companies to be familiar with local labor regulations and business practices in China and Taiwan, even if they are not directly responsible for any staff there.
