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Takeover halted due to protests

By Hu Yinan (China Daily/Agencies)
Updated: 2009-08-17 07:44

Restructuring of the plant along commercial lines began in August 2008 under the approval of the government of Puyang and the factory suspended all operations in March, sending all employees home.

Workers had tried unsuccessfully to halt the privatization by blocking traffic twice since March.

They said Fengbao, with only 1,500 available job positions, had a bad reputation for unpaid wages and lack of work insurance. They insisted that Fengbao is just an empty shell and has no right to buy a healthy organization such as Linzhou Steel.

The workers said all Linzhou Steel employees were forced to accept compensation of only 1,090 yuan for each year of service before signing a new contract with Fengbao.

Shang Xinkai, a worker in her 20th year at Linzhou Steel, told China Daily that privatization, or "corporate restructuring" in official terms, should aim for the healthier development of the enterprise, not "selling State-owned assets off to private hands and sending workers home like trash".

Dong, the Puyang SASAC official who Shang claimed to have treated during his days as a hostage, reportedly acknowledged that all eight State-owned enterprises he helped privatize in Puyang went bankrupt.

The Puyang SASAC evaluated Linzhou Steel's assets at about 320 million yuan. The workers insist that the enterprise is worth "at least 800 million yuan". They see the SASAC report, which valued a Linzhou Steel-affiliated cement factory with an annual production capacity of 100,000 tons at no more than 17 yuan, as a joke.

Officials say Linzhou Steel's impending bankruptcy is a core rationale for restructuring. But a senior employee, who has worked at the factory for 39 years, said its management "deliberately screwed up" to legitimize Linzhou Steel's privatization, which workers see as a move to "sell them out" to fill the pockets of the rich and the powerful.

"It's a classic model of how State-owned assets are lost in corporate restructuring efforts in China. All 40 years of Linzhou Steel's assets are now in the hands of a single person," said the worker, who refused to give his full name.

Liu Junsheng, Linzhou Steel's board chairman and general manager, reportedly told an earlier inside meeting that "the more we're in the red, the more it benefits Linzhou Steel's restructuring, and the more it benefits our purchase," according to petition letters provided to China Daily by workers.

Puyang's deputy mayor, Wang Xiangling, and police chief Ruan Jinquan reportedly has promised the workers to take their concerns seriously.

An anonymous Linzhou Steel staff member recalled officials as having said they "wouldn't be able to sleep without dealing with this issue properly".

"But that was the end of it. We never heard anything from them since," the staffer said. Wang, also former chief of Linzhou Steel's restructuring team, was fired after the protest.

On Saturday, the provincial mediation team met with representatives from Linzhou Steel and employees about the privatization. But the workers feel they were still left out of the decision-making process, and demanded future meetings be held with representatives of their own.

The current representatives, they say, are cadres who "can no way" stand for their interests. "We must re-elect workers' representatives," a senior staff said. "Not one among us has ever agreed to privatize or sell off the enterprise."

(For more biz stories, please visit Industries)

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