Vietnamese workers strike for higher pay at Japanese company

Nidec Servo staff in Ho Chi Minh City are demanding a 6% percent pay rise for all employees.
By RFA Vietnamese
2022.08.26
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Workers of Nidec Servo on strike on Aug. 25.
Lao Động (Labor) newspaper

Nearly 1,000 workers at a Japanese company in Vietnam’s Ho Chi Minh City (HCMC) have gone on strike for higher wages.

Workers walked off the job on Thursday morning at Nidec Servo’s factory in Hi-Tech Park, based in Thu Duc City, a municipality of HCMC.

The strike continued Friday with workers sitting down outside the factory.

sitdown.jpg
Workers hold sit-down protest outside Nidec Servo’s factory on Aug. 26.
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Employees are demanding what they call ‘a reasonable salary increase’ for different ranks of workers.

Before the strike the workers submitted a petition for a step-by-step salary increase to Nidec Servo’s board of directors, according to state-controlled media.

Workers filed the petition after receiving an email from the company’s human resources department. It announced management’s plan to raise all workers’ salaries simultaneously by VND 260,000 (U.S. $12) a month. 

Nidec Servo’s staff rejected the offer, saying the across-the-board increase was unacceptable. They proposed a 6% pay rise on every salary level.

Workers also criticized plans to cut benefits, such as a travel allowance and year-end parties.

"We sympathize with the company's difficulties, but the salary increase is not reasonable," a female employee told the company's board of directors in a meeting on Thursday morning.

Nidec Servo is a wholly Japanese owned company headquartered in Kiryu-city, in Japan’s Gunma prefecture. Its Vietnam plant makes consumer, industrial and automobile motors.

Last December the Japan Trade Promotion Organization (JETRO) published a report saying that more than 54% of Japanese businesses operating in Vietnam were expected to have made a profit last year in spite of coronavirus restrictions affecting production in the country. JETRO said around 29% of Japanese companies in Vietnam probably lost money in 2021.

More than 3,000 Japanese companies had operations in Vietnam in 2019 before the COVID pandemic hit. JETRO said the companies chose Vietnam over other ASEAN countries due to the size of its market, potential growth, cheap labor and stable political situation.

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