by friends of gongchao (March 2013)
An electronics factory in a special economic zone, low wages, long working hours, hire-and-fire labor contracts – what we primarily hear from China, Malaysia, or Mexico, happens about 350 kilometers from Berlin, Germany, too. At the end of 2011, workers organized against the bad conditions in the Chung Hong Electronics factory, a Taiwanese-Chinese contract manufacturer that produces components for the Korean electronics multinational, LG, in the Wrocław-Kobierzyce special economic zone (SEZ) in South-West Poland. At first, Chung Hong tried to put the workers off and did not react to their demands. Later it tried to repress them. When the workers went on strike, the management dismissed a large part of the participants without notice. Many workers had joined the anarcho-syndicalist union Inicjatywa Pracownicza (Workers' Initiative), which, after the failure of the strike, started a campaign against Chung Hong, the working conditions in the Polish SEZs, and so-called junk-contracts (umowy śmieciowe). The Polish government has increasingly used such contracts since the beginning of the crisis in its attempt to further reduce labor rights. This article tries to shed light on, and discuss, the background and the development of the conflicts around Chung Hong.
Special Economic Zones
Poland is the only member state of the European Union that has special economic zones (SEZs). In the years of the so-called transformation after 1989, the collapse of a big part of the former state industry caused an increase of unemployment to more than 20 percent. After 1995, the Polish government set up SEZs to attract transnational capital investments. Poland advertised its low wages and relatively well-trained work force, and it offered tax rebates, cheap land, customs reductions, and direct subsidies. The European Union treaties prohibit such zones, but before its accession in 2004, Poland negotiated that its 14 SEZs could continue to exist under certain conditions until 2020. A further extension is currently being discussed.
New SEZs could not be set up in Poland, but over the years more and more industrial areas were added to the existing zones. Some of these areas are far away from the zones they belong to. Today, the SEZs are legal constructions that, in fact, consist of hundreds of subzones spread out over the whole country. The subzone Wrocław-Kobierzyce with the Chung Hong factory for instance, is over 400 kilometers away from Tarnobrzeg, the SEZ it belongs to. Through the alignment of existing industrial areas, an increasing part of factory labor is integrated into the SEZs. Until now, about ten percent of the employees in manufacturing in Poland work in a SEZ. Among the biggest investors are international companies like Volkswagen, Fiat, General Motors, Toyota, Electrolux, Gilette, Michelin, Bridgestone and Kraft.
After the beginning of the crisis in 2008, Poland was the only country in the EU without a single quarter year of shrinking GDP. Despite the economic growth, Polish workers have little reason for rejoicing. The unemployment rate has been rising since 2008, real wages stagnated in 2009 and have been falling since 2011.
Poland is the leading country in the EU regarding precarious labor relations: The number of limited labor contracts increased from 5.8 percent in 2000 to 27.7 percent at the end of 2010. At that time the EU average was 14 percent. A further 20.9 percent of the employees in Poland, most of which were made up of young people, worked on the basis of contract work instead of labor contracts. Nowadays, these "junk-contracts" are even a topic for the big unions, parties, and the media. In the SEZs and in factories in general, contract work does not play a big role though. Instead, employees with limited labor contracts or those hired through temporary agencies make up a big part of the workforce.
The company Chung Hong was founded in Taiwan, but since 1996 the production facilities have been situated at several locations in the People's Republic of China: Suzhou, Tianjin, Shenyang and Yantai. Chung Hong is a contract manufacturer and produces mainboards for TVs at these locations e.g. for LG, Philips, BenQ, Acer, Kingston, and Samsung. In 2010, Chung Hong employed a total of 2,600 workers.
The Chung Hong factory in Poland is situated 25 kilometers south of the city of Wrocław in an industrial area directly beside a highway. The South Korean electronics company LG settled there after 2004 and brought its suppliers too. One of them is Chung Hong Electronics, which produces mainboards, LG's monitors and TVs. The plant was opened in 2007. Today it has 200 employees. The production workers are divided into several groups. Each group wears different colored work coats and has to handle different work tasks: One group applies glue onto the board, the second group plugs components into the board, the third group tests the functions, and the forth group fixes defects. That way, 140 to 200 boards are produced every hour i.e. one every 15 to 30 seconds. Overlaying the functional division of work is a clear gendered division of labour: Men do the better paid work e.g. as machine setters, while women have to follow the machine rhythm and stay on the lowest wage levels even after years of service.
The workers earn between 1,500 and 1,600 złoty (about 380 euros) before tax, which includes wage supplements and bonuses for attendance and seniority; the temporary workers get 1,400 Złoty (340 euros). According to the Chung Hong workers this is even a bit less than in the neighboring companies in the SEZ. Most employees are young women from small cities near the border to the Czech Republic. That region is about 100 kilometers away from the Wrocław-Kobierzyce SEZ and has an unemployment rate of 20 to 30 percent. Only a few can afford their own car, and the journey on the overcrowded company bus takes one to two hours. So the workers spend 12 hours a day at work or commuting. Their children stay with grandmothers or other relatives because affordable places in kindergartens do not exist.
Officially, Chung Hong has a 5-day working week, depending on the season, with a two- or three-shift system. The working time is eight hours daily with a 20-minute lunch break, but the workers have to do overtime on a regular basis. In particular, Chung Hong orders the workers to work on Saturdays. The workers hate the compulsory overtime, but at the same time that's their only chance to increase their wages. Most workers have limited labor contracts for six months or one year and these contracts get prolonged until the company would legally be obliged to give the worker a permanent contract. Those sacked at this moment are often re-employed soon after, again with a limited contract. That way the company has no problem getting rid of workers it does not like anymore, and can keep workers who have "proved themselves". The workers feel the insecurity: "Here you never feel safe. One day you have work, but the next day you don't. You never know who will be affected."
In 2009, Chung Hong used the financial crisis as an excuse to tighten working conditions in the factory. Wages as well as supplements and the social fund (used to pay the holiday and Christmas bonus etc.) were cut, and more work was divided among less workers. At the same time, the tone of management got more confrontational, and precarious employment was significantly expanded. Now, in peak seasons with many orders in Spring and Fall, up to 50 percent of the production workers are temporary workers, employed for a few days and up to several months., If they call in sick just once, their contract is often not extended.
Intervention and Organizing
In the Fall of 2011, a young sociologist, member of the anarcho-syndicalist union Inicjatywna Pracownicza (IP, Workers' Initiative) worked in the plant as a production worker for several months. She wanted to do research on the working conditions in SEZs for her PhD thesis. She was in part inspired by the works of the Chinese sociologist Pun Ngai, in particular the book Made in China, in which Pun Ngai describes the work on the assembly lines in an electronics factory in Shenzhen, China, in the mid 1990s, including the exploitation, the special situation of women who constituted the majority of production workers, the daily forms of resistance, the role of Chinese and transnational capital, as well as the complicity of the state in enforcing work in the globalized factories.
The sociologist worked at Chung Hong as a production worker, interviewed workers on the conditions in the factory, and distributed information on the IP. When her limited contract terminated shortly before Christmas, an IP group had already been formed in the factory. This group put forward demands to the management and prepared for industrial action.
Beforehand, there had not been any union in the factory. A small circle of workers had been thinking for a while about how to act against the deterioration of the working conditions. Among other things, they had met with representatives of various unions, but faced disinterest regarding their situation. The meeting with the IP activists was more promising, and the IP activists explained to them how they could set up a union group within the framework of Polish labor law.
While the IP often plays the role of a left-wing union opposition in companies with other active unions, in formerly union-free companies like Chung Hong, it is different. Workers from such companies are often looking for contacts to a union in order to give a form to a smouldering conflict or their ongoing struggle. The IP is more prepared to get engaged in difficult conflicts than the big unions, but the workers decision to form an IP group does not always seem to be based on a political decision. Since such conflicts often end with the dismissal of the workers, some of these groups also dissolve soon after.
Those who took the initiative at Chung Hong were from the small town Nowa Ruda, about 80 kilometers from the plant. Some of them had known each other on a private basis beforehand. Most of them had been working at the Chung Hong plant for some time and had unlimited contracts. Collective organizing with other workers proved difficult though. Because of shift-work, long working hours and the commuting from different home towns, assemblies had to take place before the beginning of a shift or on free Sundays. Common discussions were almost impossible because the workers lived far away from each other and had no car. Nevertheless, within three months, about 80 out of the 200 employees joined the IP, among them some temporary workers. With the exception of a few members who enjoyed special legal protection against dismissals, the other members of the IP group in the company remained anonymous to protect themselves against management repression.
Already in December 2011, the IP group had informed the Chung Hong management about its existence and put forward demands: a wage increase of 300 złoty per month for all, permanent employment for the temporary workers, restoration of the yearly inflationary adjustment and the social fund, abolition of compulsory overtime, no cancellation of the company bus system. In addition, the IP group demanded information it was entitled to get as a union, about shift-plans, wages, the social fund etc., and it asked for a bulletin board. The Chung Hong management did not react at first, and then tried several tricks, delayed the process, and threatened the workers. It also hired an international law firm that consults companies in Polish SEZs as well as a new personnel manager known as a "union buster". The few union members the management knew by name were subsequently controlled and harassed.
The IP group did everything it could to reach the position where it could legally start a strike, and tried to avoid any formal mistakes. Therefore, it went along with the delaying tactics of the Chung Hong management. When the collective bargaining, including the mediation phase, did not bring any results, the IP group scheduled a strike ballot for June 2012. The management continued to put pressure on the union group and demanded to organize the strike ballot itself. The activists could not enforce their own plans and tried to conduct the strike ballot on the company buses. That clearly shows that until then it had not managed to develop enough practical strength within the factory – it had not been successful in holding assemblies in the plant without company interference or even just in getting a bulletin board. Under such circumstances (and because union people with ballot boxes could not get on all the company buses) only 54 percent of the workers finally took part in the strike ballot. 89 percent of those voted for a strike, but taking the low participation into account, that is the equivalent of only 48 percent of the permanently employed workforce. The temporary workers could not participate in the strike ballot because they are not even considered to be part of the workforce. Therefore, already during the preparation of the strike, the union group's active workers did not manage to overcome the multiple divisions between unlimited, limited, and temporary workers as well as between people from different home towns.
The strike was due to begin on Monday, July 2, 2012, one week after the strike ballot had ended. On Thursday, June 28, the most prominent activist of the union group was kicked out of the company bus by the company security guards and his supervisor. He was given a letter stating his dismissal without notice. When the workers in the factory heard about this, the leaders of the union group and 15 out of 50 workers on the late shift at the plant downed tools spontaneously. The national leadership of the IP confirmed by phone that a protest strike against the dismissal of a unionist who is participating in industrial action is covered by the labor law. In order to escape the permanent surveillance in the workshop, the striking workers went to the canteen and formed a strike committee. They had not expected that the supervisors would immediately lock the door between the canteen and workshop, cutting off all contacts to the rest of the workers who were still on the production lines.
The management declared the spontaneous strike illegal and tried to summon the striking workers into the office one by one – without success. Later the company security guards came and ordered the striking workers to either stay in the canteen or leave the company premises. Both sides called the police, the management because of an "illegal strike", the workers because of unlawful detention. The police came, but left again without intervening. After some hours, the striking workers left the factory and were driven home in special company buses, separated from the other workers.
The next day, 14 more workers joined the strike during the early shift, but that was it: no one joined after that. Originally, the unlimited strike action decided on during the strike ballot was supposed to begin after the weekend. However, due to the isolation of the spontaneous strike the dynamic turned against the activists. By Friday, the management had already put pressure on those workers who stayed in the workshop and asked them to sign declarations of loyalty to the company, stating that they would not take part in the strike. Many did actually sign these declarations. Contact between the striking workers and the others was largely prevented by taking the strikers to the plant in separate company buses and not allowing them to enter the workshop. Finally, only 29 workers participated in the strike – not even half of the union members.
The locked-out workers continued this minority strike until July 10, mostly by gathering in the company parking lot with banners saying "We are no machines", "The management lies", and "An end to exploitation". They were supported by sympathizers on the road outside the company gate.
On July 10, all striking workers were sacked (with one exception): 24 workers got a letter of dismissal without notice, four union members who were protected against dismissal by the labor law were released from work indefinitely. So the strike had practically finished. Since unions in Poland give no strike pay (the IP would not have the resources to do so anyway), and since the wage had not been sufficient to get by until the end of the month even without a strike, a long-lasting, symbolic continuation of the strike as a form of protest outside the plant (as, for instance, at Gate Gourmet in Düsseldorf, Germany, in 2005/6) was out of the question. The sacked workers have a good chance of getting a court verdict for compensation or even reinstatement, but these court cases take a very long time in Poland, so that was not relevant in that situation.
The IP reacted to this unexpected development with a public campaign. It launched an appeal to send protest letters and emails to Chung Hong and LG, and it asked for financial support for the striking workers. It also proposed to organize rallies in other countries in front of LG offices and plants. Sympathizers translated strike reports and demands in several languages (including Chinese and Korean).
On July 11, one day after the dismissals, the sacked workers and supporters demonstrated through the SEZ from the main LG plant to the Chung Hong factory. During the shift change they distributed leaflets to LG workers, pointing at the common problems in the factories and asking for their support of the strike at Chung Hong. Meanwhile, the news had spread that LG workers had been used at Chung Hong as scabs to keep up production.
On July 16, about 30 sacked Chung Hong workers and supporters occupied the office of the Polish Agency for Industrial Development in Warsaw for several hours. This state agency is responsible for licensing factories in Polish SEZs. The demonstrators demanded that the agency intervene and act against the illegal lock-out of the workers by Chung Hong. As expected, the agency did nothing of the sort, but the action caught the attention of the media. Some media reports attacked the anarchists and their "mole" at Chung Hong (the sociologist), but others focused on the working conditions at the factory and in the SEZs. Some opposition politicians used the opportunity to publicly declare their solidarity with the workers. Clutching at straws, the workers themselves held a press conference in the Polish parliament; however, this did not change their situation in any way.
Shortly after the end of the strike, Chung Hong began its three-week company holiday. According to the workers, the company had massive problems with productivity and quality when the holiday ended. The sacked workers had been amongst the most experienced employees and the newly hired staff had to be trained first. At least one sacked worker was offered a job in September and accepted it after talking to the others who had been dismissed.
During the strike, money had been collected for a strike fund, but that was not enough to support 24 people and their families for a longer period. Since the job center suspended any support for the workers because they had been sacked for "disciplinary" reasons, they had no other choice but to look for new jobs immediately. Some now work in other companies in the SEZ, others commute over the border to the Czech Republic.
The workers and the IP explain the defeat on the one hand with the unfavorable balance of power, on the other hand with various "tactical" mistakes: The worker activists had no experience with industrial action. Well, they are not the only ones in post-transformation Poland. Their inexperience could be the cause for underestimating the unscrupulousness of the company management. Even the IP as a militant union had not been involved in such a case before and was not prepared for the harshness of the conflict either.
Would it have been cleverer to wait for two days after the first dismissal and to start the strike action two days later as scheduled, instead of reacting to the provocation with ill-considered actions? That could have surely demotivated the most active workers, and it could have looked like a tacit admission of defeat; in addition, the management could have tried to play other tricks anyway.
The attempt to include LG workers and to address the whole "flat-screen production unit" across the Wrocław-Kobierzyce SEZ came too late. A struggle against productive cooperation along the production chain could have helped to overcome the disguise of this cooperation that is based on splitting-up production in small companies, and to develop more disruptive power. However, these productions chains only become visible when a struggle at one point paralyzes the whole chain. In that sense, including the LG workers was no precondition for a successful strike at the supplier Chung Hong, but could have rather been its result if the strike at Chung Hong had actually had an effect on the production at LG.
These are "tactical" questions, but the main problem was that the activists stayed isolated during the strike. This also leads to the question of whether the struggle, which followed legal norms and used union methods, worked out for the workers' group in the way it had expected after all. Before setting up a union the activists had said their colleagues stayed passive out of fear of repression and dismissal. Therefore, the aim was to create a safe framework – the union – that would relieve the workers of that fear. The IP had supported the workers in that analysis.
At first, they seemed to be successful because a big part of the workforce joined the union and finally voted to strike during the ballot. However, during the strike, the activists were standing alone because those who participated were mostly a minority made up of young people who had worked in the company for a while and had permanent labor contracts. Participation did not include the majority of workers with limited contracts, nor the older workers. The division between permanent workers and those with limited contracts or temporary workers did not seem to be the main factor though, but the fact that the group of friends from Nowa Ruda had not managed to expand communication beyond their group. The majority of workers never went beyond a passive compliance with the union and consent to the strike, because the factory regime and the separation based on the living situation, the bus schedules and the lack of money, made collective discussions very hard, if not impossible.
Instead of focusing on "union activity" and the ability to engage in collective bargaining, a small but determined group could have experimented with actions outside the legal or union framework – as organized "quality failures" or slow-downs – actions that could have put pressure on management while the workers would not have had to step out of anonymity as much. These actions could have also included the temporary workers.
Within the IP, the defeat of the strike has triggered different reactions. A rather syndicalist current sees the reasons for the failure at Chung Hong on a tactical level and seems to be willing to act even more "like a proper union" in future conflicts; that would blur the differences between them and the mainstream unions further. An activist current sees the union not as an end in itself but as a means to make contact with militant workers and to intervene politically in the class struggle. This current believes that this also works in cases like Chung Hong, and it blanks out the problems connected with the union form. However, strikes like the one at Chung Hong lead to frustration, especially among younger IP activists who were especially active and engaged as external supporters and had expected more political results. People from this current also voice some critique of the union as a strategy.
What do the sacked workers think? Despite the failed strike, they see their struggle in retrospect not as fundamentally wrong or in vain. The Polish development model – in 2009 celebrated by Prime Minister Tusk as the "green island" in a Europe shaken by the crisis – offers no perspectives for workers, and they know that better than anyone. The strike did not work out in this form; but that some people began to resist at all was an important experience for the workers, and one that was visible for many others. This experience could be a starting point for conflicts to come.
This article was first published in German in the book Pun Ngai, Lu Huilin, Guo Yuhua, Shen Yuan (ed.): iSlaves – Ausbeutung und Widerstand in Chinas Foxconn-Fabriken (Exploitation and Resistance in China's Foxconn-Factories), Wien, 2013: http://www.gongchao.org/de/islaves-buch
At the end of 2011, 241,594 workers were officially employed in the Polish SEZs (http://orka.sejm.gov.pl/Druki7ka.nsf/0/F000FD11858918DEC1257A100028ECD0/%24File/446.pdf). That is the equivalent of 1,7 percent of the total of 14,145,000 employees in Poland or 9.9 percent of the total of 2.440.300 employees in manufacturing (http://www.stat.gov.pl/cps/rde/xbcr/gus/oz_maly_rocznik_statystyczny_2012.pdf).
http://www.stat.gov.pl/cps/rde/xbcr/gus/POZ_prezentacja_Konferencja_25_wrzesnia_2012.pdf; this official wage statistic neither includes contract work nor employees of small firms with less than ten employees. See http://sredniaplaca.pl
http://www.eurofound.europa.eu/eiro/2011/11/articles/pl1111019i.htm, http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=lfsq_etpga&lang=en, http://www.pip.gov.pl/html/pl/sprawozd/10/pdf/r05.pdf
We do not have statistical data on this. Before the strike at Chung Hong, the proportion of workers with limited contracts or contracts with temporary agencies was about 80–85 percent of the company's workfore.
In 2011, the minimum wage in Poland was 1,386 złoty before tax. In 2012 it was 1.500 złoty before tax. Chung Hong workers said that some of them earn less than the minimum wage.
The IP came out of the anarchist scene and is still closely linked to it. In 2004, the IP was officially set up as a union after a merger with disappointed left-wing unionists from other small unions. The IP is organized according to principles of direct democracy and has no paid staff or bureaucrats. See http://ozzip.pl/
Her research report is available in Polish at http://www.ekologiasztuka.pl/pdf/strefy_raport_maciejewska_2012.pdf
Pun Ngai: Made in China: Women Factory Workers in a Global Workplace. Durham, 2005. In Polish: Pun Ngai: Pracownice chińskich fabryk. Poznań, 2010. One chapter of the book was published in German as part of: Pun Ngai/Li Wanwei: Dagongmei. Arbeiterinnen aus Chinas Weltmarktfabriken erzählen. Berlin, 2008, see http://www.gongchao.org/de/dagongmei-buch.
In Poland, a union can legally become active in a company if at least ten percent of the employees form a union group. In case it is the first union in the company, it automatically represents all employees. Strikes can only be called by unions. The collective bargaining process is similar to the one in Germany: cancellation or termination of the collective agreement (in case there was one), demands, negotiations, strike ballot, mediation, and finally, but only permitted as the last resort: strike.
At the beginning, Chung Hong had limited the labor contracts to such a short period that some of the employees had to be hired permanently after a relatively short time (because of several contract renewals). Therefore, today 15 to 20 percent of the Chung Hong workforce have unlimited contracts, more than in other similar companies in SEZs.
One striking female worker had called in sick during the spontaneous strike.
The campaign and its media echo probably played a role in putting the "junk contracts" on the public agenda, even leading to an official political discourse. However, this was detached from the situation at Chung Hong where the low wages and bad working conditions were not based on contract work outside the labor law but on ordinary working contracts (regulated by the labor law).
Published on: http://www.gongchao.org/en/texts/2013/strike-in-chinese-company-in-polish-s