Vietnam’s Labor Unrest

July 5, 2011 at 7:00 am

In May, Japanese motor maker Minebea broke ground in Phnom Penh for a 5,000-worker plant. The company had at first considered Vietnam but rejected it because strikes had become increasingly common there. “A strike would be trouble,” Yasunari Kuwano, a spokesman at Tokyo-based Minebea, says of the $62 million plant, which will make motors for appliances and digital equipment. “Labor is the key focus for us in choosing Cambodia.”

As Minebea was starting to build its plant, London-based cable maker Volex Group and Japanese lingerie company Wacoal Holdings (WACLY) were among the foreign investors in Vietnam facing illegal wildcat strikes. Workers are demanding better pay as the highest inflation in Asia hurts their purchasing power. Inflation quickened to a 29-month high of 19.78 percent in May, stoked by fuel and electricity prices. The key index for the Ho Chi Minh City Stock Exchange has declined about 14 percent over the last 12 months, the worst performance for that period in Asia, and the currency has slid 8.6 percent against the dollar.

Vietnam had 336 strikes in the first four months of 2011, according to its General Confederation of Labor: That’s on course to beat the 2008 record of 762. Many are wildcat stoppages, which lack legal authorization, according to the Geneva-based International Labor Organization. “Every day, somewhere in the country there is a strike,” says Youngmo Yoon, a Vietnam labor specialist for the ILO. Average wages should rise 12 percent this year.  Read more.

O. Ha, D. Pham, Bloomberg Businessweek, June 23, 2011

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Entry filed under: NKITA, Vietnam.

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