Daily Lessons from Life 27 July 2009

"July 27, 2009, 12.25 pm (Singapore time) - China takeover scrapped after workers kill manager

BEIJING - Chinese authorities have scrapped the takeover of a steel plant where workers killed a manager in fury at threatened job cuts, an official and state media said on Monday.

Workers at the Tonghua Iron and Steel Group beat to death newly appointed manager Chen Guojun on Friday after he threatened to lay off up to 30,000 people in a controversial restructuring, the China Daily reported.

Mr Chen was killed when about 3,000 company workers forced a production shutdown at the plant in northeast China's Jilin province after an announcement that privately-owned Jianlong Group was taking over Tonghua, it said.

'Chen disillusioned workers and provoked them by saying most of them would be laid off in three days,' the China Daily quoted a local police officer identified only as Wang as saying.

After severely beating Mr Chen, workers clashed with police and refused to allow medical personnel to attend the badly injured general manager. Mr Chen was declared dead late on Friday after finally being taken to hospital.

A spokesman with the Jilin provincial government surnamed Li confirmed the killing and the protests when contacted by AFP on Monday, but refused to go into detail.

'The Jilin provincial government has decided to stop the merger plan,' Mr Li said.

'The police have launched an investigation into the killing.' Xinhua news agency said the government halted the merger plan 'to prevent the situation from expanding,' apparently referring to the worker unrest.

The Hong Kong-based Information Centre for Human Rights and Democracy said in a statement over the weekend that over 30,000 workers were involved in the protest, while as many as 100 people were injured in clashes with riot police.

China sees many large-scale protests each year, often sparked by allegations of government corruption and fuelled by a widening gap between rich and poor."

This is a very interesting case! It is the first time I heard that a General Manager get killed by his workers!! I am sure the GM never saw it coming!!

Lessons for me are:

1. potentially insensitive to the emotion of the workers who were about to be retrenchned within 3 days after the new 'owners' came in! Some of these workers had probably being around far longer than 3 days, or more like 3-year or 30-year!;

2. without the details into the compensation arrangement and how the announcenment was actually made i.e. in what tone and what manner and in what emotional stage were the workers in, etc I can only ventured to guessed that the message was not received very well. Normally, security arrangement would have been made to make such an unpleasant message. Of course, with 3000 enraged workers, the security arrangement would have been overwhelmed. This showed that when emotion takes over, the rationality of why the workers need to be laid off so that the enterprise can be profitable again, etc simply have no chance of being heard, much less accepted!;

3. this is a very serious incident as a man lost his life while at work. It is a very good case study for those who come after him to carefully consider the factors to take into account when taking over an ailing enterprise and how to deal with the, supposedly, over-employed and redundant workforce. 30,000 people is a lot of people to laid off. In China, when the social security network is not fully built up, these people will have NO where to turn to. This incident is just a small representation of the bigger challenge China is facing across the lands where ineffficient and labour intensive enterprises with large workforce need to become more efficient and productive without such tragedy!

Would a 7e Leader had done differently?