This posting is an update to our previous Supply Chain Matters posting regarding Lenovo’ intent to acquire the x-86 hardware server business from IBM.
Last week, approximately 1000 workers joined a labor stoppage at the IBM Systems and Technology production facility in Shenzhen China. Reports indicated that workers were angered over reports of severance benefits that would be offered by IBM if workers elected not to join Lenovo, as well as the potential for lower wage rates when Lenovo takes control of the facility. The latest reports are indicating that the plant reopened yesterday, nine days after the employees walked off their jobs.
Today’s Wall Street Journal reports (paid subscription or free metered view) that IBM fired 20 of the strikers for taking part in unlawful assembly that led to the shutdown of the plant. A written communication by IBM provided to the WSJ indicates that actions were within Chinese law and whether employees elect to work for Lenovo is an individual decision. Further stated is that while IBM is not required to do so, the company is ready to provide an equitable severance package to those workers who elect not to join Lenovo. The WSJ additionally reports that returning workers may have been offered a bonus payment to return to work during the period when the acquisition becomes finalized. The company indicated that growing numbers of workers are beginning to return to work.
A local Chinese labor union spokesperson is quoted as indicating that IBM’s approach has been “unyielding”, and that the workers do not understand how this situation is being handled.
For its part, Lenovo issued a position statement on its web site re-iterating that any integration of facilities will not be conducted until the acquisition is completed, and that the current work stoppage is an internal matter with IBM. Lenovo’s statement goes on to state that the intent of the acquisition is to gain the talent and experience of the existing x-86 business resources and that the company look forward to welcoming transitioning employees in several months’ time.
Obviously, this is a sensitive time of transition for both IBM and Lenovo.
Globalization brings on new dimensions of activism. As a blog commenting on global B2B/B2C and supply chain management developments, we did not expect that we would be posting commentaries on labor work stoppages or trade union elections at Amazon distribution fulfillment centers in Germany and the United States. Who can forget the incidents of worker suicides or rioting that occurred at Foxconn facilities in China, working on assembling products from Apple. Now, a work stoppage at an IBM production facility in China.
These are extraordinary times across industry supply chains.