Workers at ABB-owned factory in China strike over benefits

SHANGHAI (Reuters) — About 500 employees of a factory in southern China owned by Swiss engineering group ABB have gone on strike over compensation and low social insurance contributions by the company, a worker and an activist said on Wednesday.

The strike at Power-One, a manufacturer of solar inverters in Shenzhen, echoes the complaints of an estimated 40,000 workers who launched China's biggest walkout in decades in April at a huge sneaker manufacturing complex owned by Yue Yuen Industrial Holdings Ltd, which produces footwear for Nike Inc, Adidas AG and others.

Solar inverters are components used in solar power systems. Officials at the Power-One Asia Pacific Electronics (Shenzhen) Co Ltd factory, contacted by telephone, declined to comment.

Calls to Power-One's global headquarters in Italy were not answered. The company, which says on its website that it is the world's second largest provider of solar inverters, is owned by ABB. The relevant officials at ABB's global headquarters did not immediately respond to Reuters emails seeking comment.

Labor activism has surged in China in recent months as slowing economic growth and rising costs have squeezed companies in industrialised areas like the Pearl River Delta in southern Guangdong province, home to the Power-One and Yue Yuen factories.

Social insurance contributions at Power-One had been made based on a salary substantially lower than workers' take-home pay, labour activist Zhang Zhiru told Reuters by phone.

Chinese law requires employers to make contributions based on a figure closer to the actual pay, lawyers say, although low contributions are the norm at many companies. Workers at Yue Yuen made similar demands.

The Power-One workers began the strike on Monday after rejecting a company proposal for back-filling contributions into China's state-run social insurance schemes, said one worker who declined to be identified for fear of being threatened by the company for talking to the media.

Activist Zhang said they also had problems with overtime pay and year-end bonuses.

Low- and middle-level managers have been playing a more active role in Chinese labour actions and Zhang said many participants in the Power-One strike were managers.

Hong Kong-based rights watchdog China Labour Bulletin, which tracks labour actions in China, says there have been 373 strikes and other work stoppages so far this year, a 20 percent increase from the same period last year.