Tonghua Iron and Steel Group riot
Encyclopedia
The Tonghua Iron and Steel Group riot was a riot incident that took place in Tonghua
Jilin province People's Republic of China
on July 24, 2009. Angry workers rioted after news of a major company layoff
. About 100 people were injured in the clash including a corporate executive who was beaten to death in the event.
Jianlong (建龙) Steel Holdings, formed in 1999 by Zhang Zhixiang (张志祥), a iron & steel merchant from Jiaxing
. Jianlong Steel had previously purchased a 36.19% stake in TISG in 2005 during the privatization attempt launched by the Chinese government, and despite not having a majority representation, Jianglong Steel Holdings nonetheless managed to have most of the managerial staff demoted and replaced by managers from Jianglong, under the claim of attempting to improve the performance of TISG. However, the managerial shake up did not bring improvement as Jianlong had promised, but instead, TISG continued its downward spiral, resulting in most of TISG workers losing their pay, with many of them suffering in the harsh cold of winter when their heat was turned off as they could not afford to pay the heating bills. By the second quarter of 2009, TISG had lost over 11 billion yuan ($159.5 million) since the 2005 Jianlong takeover and its managerial reshuffle. Jianlong Steel responded by selling out all of its shares of TISG, begun to get out completely at the start of 2009, citing that Jianglong could no longer handle the unacceptable loss of TISG, and by March, 2009, Jianlong claimed that it was completely out and no longer responsible for TISG. However, as the market rebounded, TISG once again begun to make profits, pulling in a profit of 45 million yuan ($6,255,00) in June alone. Witnessing the resurgence of TISG, Jianlong once again asked to purchase shares of TISG in July, 2009, merely four months after its complete pullout, and this time it was the controlling share of 65%. The request was approved by provincial officials of Jilin province.
Workers feared that a corporate takeover would lay off 30,000 employees in 3 days. Workers earn a monthly salary of about 300 to 500 yuan ($43.92 to $73.20), compared with 2,500 yuan ($366) per month before Jianlong's first takeover bid.
(US$438,000) in 2008, while some retirees received as little as 200 yuan ($29) a month. Since Jianlong's takeover of TISG, workers' salary had not exceeded 1,000 yuan ($145) as the TISG steadily declined, and in the recent financial crisis, workers' salary is further reduced to 500 yuan ($72.5). After the news, some 30,000 disgruntled Chinese steel workers clashed with riot police in protest over a takeover deal. Chen was then beaten to death when he threatened the fire all of former workers of TISG and replace them with new workers. About 100 people were injured in the incident, and several police cars were destroyed. A Tonghua company spokesman denied 30,000 protested, saying they only have 13,000 people on payroll. Xinhua news agency
put the number of protesters at 1,000. Local residents and observers claimed that the 30,000 members included the family members and retired and laid-off workers of employees.
Tonghua
-Economy:Traditionally, Tonghua occupied a railhub position in a region of China noted for trade in only three agricultural commodities. These were ginseng, marten furs and deer antler products. In the 1980s Tonghua had some success with a wine distillery producing sweet, sticky red wines that...
Jilin province People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
on July 24, 2009. Angry workers rioted after news of a major company layoff
Layoff
Layoff , also called redundancy in the UK, is the temporary suspension or permanent termination of employment of an employee or a group of employees for business reasons, such as when certain positions are no longer necessary or when a business slow-down occurs...
. About 100 people were injured in the clash including a corporate executive who was beaten to death in the event.
Background
News spread that the state-run Tonghua Iron and Steel Group (TISG) was being taken over by the privately owned BeijingBeijing
Beijing , also known as Peking , is the capital of the People's Republic of China and one of the most populous cities in the world, with a population of 19,612,368 as of 2010. The city is the country's political, cultural, and educational center, and home to the headquarters for most of China's...
Jianlong (建龙) Steel Holdings, formed in 1999 by Zhang Zhixiang (张志祥), a iron & steel merchant from Jiaxing
Jiaxing
Jiaxing is a prefecture-level city in northern Zhejiang province of Eastern China. Lying on the Grand Canal of China, Jiaxing borders Hangzhou to the southwest, Huzhou to the west, Shanghai to the northeast, and the province of Jiangsu to the north....
. Jianlong Steel had previously purchased a 36.19% stake in TISG in 2005 during the privatization attempt launched by the Chinese government, and despite not having a majority representation, Jianglong Steel Holdings nonetheless managed to have most of the managerial staff demoted and replaced by managers from Jianglong, under the claim of attempting to improve the performance of TISG. However, the managerial shake up did not bring improvement as Jianlong had promised, but instead, TISG continued its downward spiral, resulting in most of TISG workers losing their pay, with many of them suffering in the harsh cold of winter when their heat was turned off as they could not afford to pay the heating bills. By the second quarter of 2009, TISG had lost over 11 billion yuan ($159.5 million) since the 2005 Jianlong takeover and its managerial reshuffle. Jianlong Steel responded by selling out all of its shares of TISG, begun to get out completely at the start of 2009, citing that Jianglong could no longer handle the unacceptable loss of TISG, and by March, 2009, Jianlong claimed that it was completely out and no longer responsible for TISG. However, as the market rebounded, TISG once again begun to make profits, pulling in a profit of 45 million yuan ($6,255,00) in June alone. Witnessing the resurgence of TISG, Jianlong once again asked to purchase shares of TISG in July, 2009, merely four months after its complete pullout, and this time it was the controlling share of 65%. The request was approved by provincial officials of Jilin province.
Workers feared that a corporate takeover would lay off 30,000 employees in 3 days. Workers earn a monthly salary of about 300 to 500 yuan ($43.92 to $73.20), compared with 2,500 yuan ($366) per month before Jianlong's first takeover bid.
Riot
Chen Guojun (陈国军), a corporate executive from Jianlong Steel company was paid a salary of 3 million yuanChinese yuan
The yuan is the base unit of a number of modern Chinese currencies. The yuan is the primary unit of account of the Renminbi.A yuán is also known colloquially as a kuài . One yuán is divided into 10 jiǎo or colloquially máo...
(US$438,000) in 2008, while some retirees received as little as 200 yuan ($29) a month. Since Jianlong's takeover of TISG, workers' salary had not exceeded 1,000 yuan ($145) as the TISG steadily declined, and in the recent financial crisis, workers' salary is further reduced to 500 yuan ($72.5). After the news, some 30,000 disgruntled Chinese steel workers clashed with riot police in protest over a takeover deal. Chen was then beaten to death when he threatened the fire all of former workers of TISG and replace them with new workers. About 100 people were injured in the incident, and several police cars were destroyed. A Tonghua company spokesman denied 30,000 protested, saying they only have 13,000 people on payroll. Xinhua news agency
Xinhua News Agency
The Xinhua News Agency is the official press agency of the government of the People's Republic of China and the biggest center for collecting information and press conferences in the PRC. It is the largest news agency in the PRC, ahead of the China News Service...
put the number of protesters at 1,000. Local residents and observers claimed that the 30,000 members included the family members and retired and laid-off workers of employees.