Newsmaker
A death and the disturbing facts behind it
By Yao Ying (China Daily)
Updated: 2009-07-30 07:48
Workers of State-owned Tong-hua Iron and Steel Group lynched Chen Guojun, an executive of the group sent by private steel company Jianlong, in Jilin province on Friday. The workers, many of whom hold shares in the State-owned enterprise (SOE), feared that the takeover by Jianlong could either cost them their jobs or force them to take a pay cut despite the company's profit of 42.7 million yuan ($6.2 million) in June.
According to reports, Chen's provocative remarks may have infuriated further an already angry group of workers. Police quoted Chen as telling the workers who had come to see him that up to 25,000 out of the 30,000 staff could be laid off.
Chen's death is a tragedy, not only because he was only in his 40s, but also because he had assumed his post as general manager just two days before the fateful day. Those who had violated the law in this incident should be held accountable.
Takeover of SOEs by private companies has always been fraught with tension. It is likely that in his enthusiasm to impose the strict plans of the new management, Chen didn't understand why the workers had reached the boiling point. Reports suggest he was insensitive to the situation.
During mergers and acquisitions (M&As) of SOEs, managers often talk about restructuring, streamlining and efficiency. They seem to be obsessed by profit, not realizing that loss of jobs and pay cuts can make or break a deal. In some cases, corrupt officials and greedy private companies join hands to sell State assets at incredibly low prices.
The government is trying to streamline the country's steel industry by encouraging M&As to create companies that are competitive at the global level. But most of such M&As come with lay-offs and/or pay cuts for workers. Their concerns should be convincingly addressed given the lack of an adequate social security system.
Wang Xidong, deputy director of Jilin provincial State-owned assets supervision and administration commission, told a press conference after Friday's incident that the deal - now scrapped - would have reformed the SOE further and was conducive to the company. The takeover, however, made many workers feel insecure and gave rise to rumors about what Jianlong was planning to do with the SOE.
Wang's statements show there was divergence in the way the deal was perceived by the authorities and the workers. Why are Tonghua workers angry if the deal is indeed promising? Since all the facts about the deal are yet to be known, we are left with more questions than answers.
Wang said the restructuring plan was in accordance with government policies and had been approved by a majority of the stakeholders. The plan didn't even mention layoffs and pay cuts, he said, and would have been in the interest of each and every employee.
A special work team designated by the provincial government had held several meetings with Tonghua Iron and Steel Group employees for a smooth takeover. So it is surprising why so many workers didn't know how the deal could have helped them instead of jeopardizing their future. And, it is strange that despite the prospect of a brighter future, they were swayed by rumors to the extent of turning murderous.
It is important to know the identity of the people who attended the meetings, and if there were representatives of workers. We should also know if workers' opinions were solicited before the deal was struck.
Conflicts between haves and have-nots are natural in a society in transformation. To prevent such conflicts, we need to promote a culture of "live and let live", where the "privileged" people in authority pay attention to the concerns of those under their charge. After all, acquisitions and mergers of SOEs are not only an economic activity, but also an important social issue.
E-mail: Yyao1119@gmail.com
(China Daily 07/30/2009 page8)
