Korean firms flee China on rising wages

April 12, 2011
By Jung Seung-hyun
Korea Joong Ang Daily

When one of the largest shoemakers in Korea invested $19 million in a manufacturing plant in Qingdao, China in 1995 with a hefty contract from Nike in hand, its future, and that of the new plant, looked bright.

However, China’s fast rising wages soon forced the firm to re-evaluate its China strategy.

Just last year, the company closed the Chinese plant and opened one in Indonesia. The new $25 million facility started production in January this year.

A T-shirt manufacturer found itself in a similar boat so it too closed down its operations in China and set up shop in Cambodia.

Factories Claim $15 Million in Damages After Strikes

Chun Sakada, VOA Khmer
Phnom Penh Wednesday, 22 September 2010

“We need to know what the union wants to raise for its members. We'll take the next step.”

The garment industry raised its loss estimates to $15 million on Wednesday in the wake of a general strike last week.

The $15 million was reported by at least 30 garment factories through the Garment Manufacturers Association of Cambodia, after thousands of workers went on strike in search of more pay.

GMAC Secretary-General Ken Loo told VOA Khmer on Wednesday the figure was based on lost production and damages factory property, costs for alternative logistics and freight, and for discounts on late deliveries.

In a statement, the group, which represents factory managers, said it would “support its members in the effort of finding justice and compensation for the loss.”

Ath Thun, president of the Coalition of Cambodian Apparel Workers' Democratic Union, said last week's strike was held legally and that losses were up to the companies. Workers would not compensate for the losses, he said.

The strikes ended after four days before further negotiations were settled on for Sept. 27.

Loo said Wednesday that GMAC had not prepared a topic for next week's talks, but its members would attend and “listen to the demands and requests of the trade union federation.

“We need to know what the union wants to raise for its members,” he said. “We'll take the next step.”

Ath Thun said the unions will not request a raise in the monthly salaries, but will instead seek an additional per diem for food, an increase in overtime rates and other bonuses to help offset the rising costs of living.

Union Threatens Massive Wage Strike

Chea Mony (far right)

By Chiep Mony, VOA Khmer
Original report from Phnom Penh
24 March 2008

Workers of the Free Trade Union said Monday they would hold a strike from Thursday to Saturday if workers are not given a $5 monthly raise.

The union, Cambodia's largest, voted Sunday to strike against 150 factories to demand for an increase in wages to offset the rising cost of goods, FTU President Chea Mony said.

In a letter to Interior Minister Sar Keng Monday, Chea Mony said the workers planned to strike unless the government resolves the wage hike and works to reduce the price of goods.

The strike will be held whether the Interior Ministry approves or not, Chea Mony said.

Interior Ministry spokesman Lt. Gen. Khieu Sopheak said Cambodia does not have a law to cover strikes, but has one against demonstrations, and he advised the workers to get permission from local authorities, such as the municipality, before demonstrating.

If public security and traffic problems occur during the strike, Khieu Sopheak asked, who will be responsible?

Chuon Momthol, vice president of the Labor Advisory Committee, said Monday he wanted to increase the price of salaries for workers to offset the higher prices, but he said an agreement between the Committee and workers allowing a raise of $50 per month from 2007 to 2010 was still in effect.

The Free Trade Union should submit a request to the Committee for a solution, which would be better than holding a strike, he said.

Ministry of Labor Undersecretary of State Oum Mean said the ministry has advised the workers to submit a request to the Committee already.

The ministry cannot order a raise, he said, because the raise must come from individual factories.

The union should hold an urgent meeting with the Committee to resolve the problem, he said, instead of striking.

Cambodia has approximately 500,000 garment workers, he added, and about 30 unions.

Cambodian garment workers threaten strike over pay

Jan 2, 2008
DPA

Phnom Penh - Cambodia's largest garment workers union would call a strike if its demands for a pay rise to keep pace with inflation were not met, its president said Wednesday.

Chea Mony, president of the Free Trade Union, said it was demanding a 10-per-cent wage hike and a new minimum wage of 55 dollars a month, up from 50 dollars a month.

In an open letter to the Garment Manufacturers Association of Cambodia president, Van Sou Ieng, Mony cited inflation, particularly for basic goods because of rising world oil prices, for the request.

'We will proceed in three steps,' Mony said in a telephone interview. 'First, we negotiate. Second, we demonstrate in the factories, and thirdly, we walk out as a group.

Van Sou Ieng was overseas Wednesday, and officials at his association said they would not consider the proposal until his return. The previous garment worker pay rise was in October 2006.

Cambodia has around 300,000 garment workers, and the trade is a major export earner and a pillar of the economy.

However, some analysts have claimed that factors including high wages compared to rival producers such as China and Bangladesh, high transport costs, erratic power supplies and corruption threaten the sector, which is mainly run from rented premises by Taiwan, Chinese and other overseas owners.