Chunghwa Telecom union puts off strike

Chunghwa Telecom Co's (中華電信) labor union yesterday deferred a scheduled strike after the government postponed a plan to sell part of the company's shares in the US.

The union had planned to strike today to protest the government's privatization plan, which employees fear could lead to large-scale layoffs.

Union leaders also said they fear control of the company would shift to large conglomerates if the sale went ahead.

Chunghwa Telecom's board approved a plan on June 15 to sell a maximum of 1.64 billion common shares -- around a 17-percent stake of the company's total shares -- mostly in the form of American Depositary Receipts (ADRs).

While the Legislative Yuan passed a resolution on May 27 demanding that the government halt the planned sale, Chunghwa Telecom obtained the approval of the Securities and Futures Bureau earlier this week to sell a portion of the government's stake overseas, which would put control of the company in private hands.

Last month Chunghwa hired Goldman Sachs, UBS AG and Morgan Stanley to manage the overseas share sale.

The Chunghwa Telecom Workers' Union (中華電信工會) said in a statement that the urgency for a strike "had vanished" because the company's ADR offering has been put off until next month.

But the union threatened to call another strike among its 28,000 members should its talks with the government fail to provide satisfactory guarantees on workers' benefits.

"Chunghwa Telecom has been a money-making firm," union head Simon Chang (張緒中) said.

"It should not be sold to big businesses at the expense of the benefits of telecom users and workers," Chang said.

Officials at the Ministry of Transportation and Communications, which owns 65 percent of the company, declined to discuss the planned ADR issuance. But they assured employees that their rights and benefits would be adequately protected.

The ministry wants to sell a 17 percent stake in the company, worth about NT$100 billion (US$3 billion), to reduce its total stake to 48 percent.

A stake of between 3 percent to 5 percent is to be sold to Taiwanese investors, and a maximum 14 percent to overseas investors through the ADR issuance.

The union said it wants the government to sign a collective agreement with the union or scrap the privatization plan altogether. However, it did not elaborate on its demands.