IBM China workers strike over terms in $2.3 billion Lenovo deal

SHENZHEN Thu Mar 6, 2014 6:36pm IST

Visitors walk past the IBM booth at the 9th China International Software Product & Information Service Expo in Nanjing, Jiangsu province September 6, 2013. REUTERS/China Daily/Files

Visitors walk past the IBM booth at the 9th China International Software Product & Information Service Expo in Nanjing, Jiangsu province September 6, 2013.

Credit: Reuters/China Daily/Files

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SHENZHEN (Reuters) - More than 1,000 workers at an IBM factory in southern China have gone on strike against the terms of their transfer to Chinese PC maker Lenovo Group Ltd (0992.HK) caused by the U.S. company's $2.3 billion sale of its low-end server business.

Several workers gather outside gate of the International Business Machines Corp (IBM.N) factory in Shenzhen on Thursday said production remains suspended for a fourth straight day.

"So far, we've heard nothing from the management or the government in response to our demands," said Hou Hongbo, a 10- year worker at the factory. "The company's attitude so far is to ignore us, but the entire production remains shut down."

The workers want higher pay if they choose to transfer to Lenovo or higher severance packages if they choose to leave. Hou said they were determined to keep their action going.

"We will definitely keep striking tomorrow," he said.

The terms offered to workers at the International System Technology Company factory in Shenzhen are "comparable in aggregate to what they currently are receiving," IBM spokeswoman Florence Ma said in an e-mailed statement. If workers choose to leave, they will receive an "equitable severance package," Ma said.

"We are hoping employees will decide to remain with ISTC," Ma said.

Lenovo declined comment.

Workers at Chinese factories are increasingly turning to protests and factory shut-downs when they feel the terms of international takeovers are not good enough or labour conditions have worsened.

Hundreds of employees stopped work at a Nokia factory in Dongguan in November, complaining of changes following Nokia's (NOK1V.HE) sale of its mobile phone business to U.S. software giant Microsoft Corp (MSFT.O).

Last August, 5,000 workers in eastern Shandong Province went on strike to protest Apollo Tyres Ltd's (APLO.NS) proposed $2.5 billion acquisition of U.S.-based Cooper Tire & Rubber Co.

(Reporting by Venus Wu, Grace Li, James Pomfret, Donny Kwok and Clare Baldwin Editing by Jeremy Gaunt)

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