Yue Yuen Industrial (Holdings) said a labor dispute that stopped some of its production this month will cost it nearly $60 million initially-and the bill could climb. Production at a footwear factory in southern China's Guangdong province has resumed after a strike over social benefits, according to a statement from the factory on Monday.
On Monday, more than 99% of 45,000 workers had returned to work. The factory has agreed to repay all outstanding social benefits and pay an extra 230 yuan (US $37) in monthly living allowances for workers from May 1. The factory's production volume accounts for about 10% of Yue Yuen's
total, the shoemaker said in a filing with the Hong Kong stock exchange
late Friday.
Protests started on April 5, when 600 workers from the plant took to the streets, blockading roads and demanding that their social insurance and housing funds be fully paid. After failed negotiations with the management, more workers joined the strike on April 14.
The footwear maker said direct losses from a strike at a plant in southern China cost it an estimated $27 million, while increased benefits to workers will cost it $31 million in 2014 alone.
Workers walked off the job at the company's Gaobu factory in Dongguan, Guangdong province, early this month in a dispute over what they alleged were insufficient social-insurance and housing payments.
Labor-rights activists have estimated that the back payments Yue Yuen needs to make would total 100 million to 200 million yuan.
