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Flexible Dimensions of a Permanent Crisis: TNCs, Flexibility, and Workers in Asia

By Gerard Greenfield
23 December 1998

Abstract

What is the relationship between this crisis and labour flexibility? The argument runs something like this: the destruction of jobs and the deterioration in the livelihood and well-being of millions of workers in the region did not occur overnight. The loss of jobs may have occurred overnight for many workers, but the nature of these jobs, the absence of ways in which they could be defended, their impermanence or transitory character, and the way in which they could be cast off so easily are all issues relating to what happened well before the crisis and what workers will face for a long time to come.

Introduction: On the Margins of the Crisis

For many, 'new' Asian Tigers like Vietnam appear to be on the margins of the crisis, affected at this stage by lay-offs in factories owned by East Asian capital and a surge in downward competitive pressure from its Southeast Asian neighbours whose exports are now much cheaper. By looking more closely at the experience of workers in Vietnam, we may be in a better position to isolate a few concrete effects of the crisis in a context less turbulent and less chaotic than the experience of workers at its center; and to shift the discussion to the longer-term or permanent dimensions of what we are facing.

(I) Lay-offs and Unpaid Wages

In recent months, thousands of workers in foreign-invested factories in Vietnam have been laid-off as East and Southeast Asian companies sink deeper into financial crisis. Workers in the garments and footwear industry, where Taiwanese and South Korean companies are the main investors, have been hardest hit. In the last two months of 1997, more than 4000 workers were sacked, and in the first three months of 1998 another 5 000 workers will be sent home. This crisis is exemplified by the Korean-owned garment factory, Juan Viet Co., where 2000 workers were sacked in the last quarter of 1997, and another 500 dismissed by the beginning of 1998. The remaining 2000 workers were denied their wages for the last two months of 1997 and were afraid that year-end bonuses would also not be paid. This led them to take strike action on January 3, 1998.

In the preceding month, over 1300 workers were sacked following the bankruptcy of the parent companies of the 100 per cent Hong Kong-owned Kollan Co. and a Taiwanese-owned factory, Yee Chung Co. Workers at Kollan Co. were instructed to stop work 'temporarily' in November, then were laid-off the following month. The workers only received 30 per cent of their wages for the last three months of 1997. In response to a series of bankruptcies which followed, the Vietnamese government and the Vietnam General Confederation of Labour announced in early January that these problems are now spreading to state-owned enterprises operating as subcontractors or joint venture partners of East and Southeast Asian companies. Bankrupted foreign companies, especially South Korean firms, like Ssangyong Corp. are suing state-owned banks and state enterprises in Vietnam for millions of dollars for money owed in overdue letters of credit.1

In many of the factories owned by East Asian and Southeast Asian capital, Tet (Lunar New Year) bonuses were not paid at all. In mid-January the newspaper, Lao Dong (Labour), brought attention to the fact that not only were workers being denied bonuses, but they could not even afford to return home for the holiday season. The significance of this lies in the fact that migrant workers from rural areas make up the majority of factory workers in the Industrial Zones and cities. Many of them were stuck in crowded factory dormitories with little food or money during Tet. A woman worker at Juan Viet Co. garment factory described their desperate situation...

(complete article is at: http://www.labournet.org/discuss/global/tncasia.html)

Louis Proyect

(http://www.panix.com/~lnp3/marxism.html)