Steel Boss Dies After Riot

A clash between mill employees and police leaves a company official dead, as workers in northeastern China's 'rustbelt' provinces grow increasingly restive over a slimming industrial sector.

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Jilin-Factory-305.jpg A factory emits smoke in Jilin city, in northeast China's Jilin province, March 1, 2009.

HONG KONG—Authorities in northeast China have called off a proposed takeover deal at a major steel factory following a violent dispute with angry workers after which a newly appointed general manager was killed.

"The manager, named Chen Guojun, was dispatched by the Beijing-based Jianlong Heavy Machinery Group to conduct the merger plan to take a controlling share in the Tonghua Iron and Steel Group," the official Xinhua news agency said Monday, adding that the workers had beaten Chen and prevented him from getting medical help.

Tonghua workers admitted beating Chen, but said his death happened later.

"He had lost a lot of blood," a protester surnamed Zhao said. "But at first we were only hitting him with water bottles. That couldn't be the cause of his death."

"Later, the leaders put it out that we had beaten him to death. This is most unlikely," Zhao said.

Some witnesses said Chen had fallen from a second story window during the melee, which officials described as "chaotic."

They said investigations were now under way into the violence, in which more than 1,000 workers overran the Tonghua Group's steel mill in northeastern Jilin province in protest at the takeover.

An official who answered the phone at the Jilin municipal security department said Jilin's top provincial officials had arrived in the city Sunday and traveled to Tonghua, where the situation had "basically calmed down."

"We are currently investigating [the death of the manager]," the official said. "We haven't found out [who is responsible]. Who can say who did it with this sort of incident? It was a collective action."

"There were more than 1,000 people there," he said.

Protest of takeover

Witnesses said a large crowd gathered outside Tonghua company headquarters Thursday, as news began to spread that the restructuring plans were already under way.

"To begin with, it was just the retired workers," a man who took part in the protests said, declining to give his name.

"Then the word spread, and we all went to gather outside the place where the meetings were being held. Then we were joined gradually by workers coming off the night shift and the family members from the factory," he added.

"If Tonghua went under, then none of the people living in this district would have any way of making a living."

Tonghua workers said the government, which controls the company, had tried to go ahead with a restructuring in which Beijing-based private steel investor Jianlong would take a controlling stake.

But they said the plan had failed to take into account the workers' rights as shareholders.

"The workers' stake in the company is dictated by how many years' service they have behind them," a long-time Tonghua employee said. 

"Some of them hold 30,000-50,000 shares. Those who have the highest stakes hold 200,000 or 300,000. Medium-ranking officials all hold 300,000 or more," he said.

The Hong Kong-based Information Center for Human Rights and Democracy said that thousands of workers kept riot police at bay for nearly a day with bricks, in clashes which injured around 100 people.

Workers were angry that Chen was paid about three million yuan ($440,000) last year, while Tonghua's retired workers received as little as 200 yuan a month, the group said. State media said they feared the workforce would be trimmed to 5,000 people.

Restructure shelved

The Jilin provincial branch of the State-owned Assets Supervision and Administration Commission, which masterminds privatization and tries to prevent wide-scale misuse of state assets nationwide, announced on local television that Jianlong would no longer be taking part in the restructuring of Tonghua.

Officials called on Tonghua workers to show restraint and to leave the scene, allowing the steel mill to resume production.

"It was chaos, and not even the people who were there can say who did it," the Jilin official said. "It is much quieter now. Basically, things have calmed down."

A second worker who took part in the protest said that no one intended to kill Chen.

"The workers only injured him. After that, he was lying there on the floor for too long," the worker said. "He had lost  too much blood. That's how it happened. He didn't get prompt medical attention."

State media said the protesters threw bricks at emergency services trying to get to Chen.

"A small number of the protesters found the injured manager who had been hidden and beat him repeatedly, while some others blocked the roads in the factory to prevent the police and ambulances from reaching the manager," Xinhua quoted government investigators as saying.

The first protester said workers suspected the government was manipulating the restructuring proposal behind the scenes.

"There was definitely behind-the-scenes manipulation," he said.

"The way they planned it was against the regulations. First, it was in breach of the Company Law, and second in breach of Party Central Committee directive No. 3, Article 5, which states that the government must only play a facilitating role," the protester said.

"Now, they are treating the company as if it was their own home, and selling it off to a private enterprise," he said.

"[China's] Company Law states clearly that companies undergoing restructuring must first hold a meeting with labor representatives."

Repeated calls to Tonghua went unanswered during office hours Monday.

Xinhua attributed the protests to discontent at Tonghua caused by falling production and salary levels amid the global financial crisis.

Voices of support

Comments added to RFA's Web site Monday were largely supportive of the workers' protest.

"It just goes to prove the old saying, that a small fuss solves small problems, a big fuss solves big problems, and no fuss solves nothing," wrote one anonymous netizen.

"We workers are powerful!" added another.

China's three northeastern "rustbelt" provinces of Jilin, Heilongjiang, and Liaoning were once the heartland of heavy industry with massive state-run firms employing entire districts and towns, running schools, hospitals, and newspapers, and providing cradle-to-grave care for workers and their families.

While China is still the world's top producer and consumer of steel, the official policy is to force the sector to slim down and consolidate. But millions of layoffs in recent decades have led to increased social unrest in the formerly booming industrial heartland.

Original reporting in Mandarin by Qiao Long, and in Cantonese by Fung Yat-yiu. Mandarin service director: Jennifer Chou. Cantonese service director: Shiny Li. Translated and written for the Web in English by Luisetta Mudie. Edited by Sarah Jackson-Han.


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