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Chunghwa's labor union goes on strike

Labor union members of Taiwan's state-controlled Chunghwa Telecom Co hold signs to protest the government's plan to privatize the telecom operator, while in the background a company representative talks to the media about the controversial plan during a press conference in Taipei yesterday. PHOTO: AFP

In opposition to the government selling its shares in the state-controlled Chunghwa Telecom Co (中華電信), the company's labor union has decided to hold a large-scale strike as from 8:30am today. Chunghwa management said this will not affect the company's services because of a limited number of workers downing tools.

"We'll launch a long-term strike starting tomorrow [Tuesday] morning, which might last two or three days," Hung Hsiu-lung (洪秀龍), a core member of the Chunghwa Telecom Workers' Union (中華電信工會), said yesterday.

The union has been opposing the government's plan to privatize the telecommunications giant, worrying that their employee pension benefits will be sacrificed.

The Ministry of Transportation and Communications, the biggest shareholder in the company, plans to auction off a 3 percent stake to domestic investors today and another 14 percent stake through American Depositary Receipts (ADRs).

This will help reduce the ministry's stake in the company from the current 65 percent to around 48 percent, making Chunghwa Telecom a private entity.

The labor union said it was seeking an injunction from a US court against an additional 13.5 percent sale of the company's equity through ADRs.

"The contracted US attorneys-at-law is to file for an injunction by a US court tomorrow at the latest to freeze Chunghwa Telecom's ADR sale," which Chuang Ping-tang, secretary-general of the labor union, insisted is a violation of the law.

Although the labor union vowed to hold strikes on a larger scale than ever, company officials are unfazed and promised the public that services will continue as normal.

"We are confident that there will only be a small number of employees joining the strike or protesting in front of the company headquarters. Backup personnel will fill the vacant posts to offer services and protect consumers' rights," said company vice-president and spokesman Hank Wang (王漢朝).

Clashes between the union and management dominated and led to an abrupt halt of a meeting held yesterday in Taipei by the company to provide detailed information about the planned after-hours auction of its shares this afternoon.

Around ten union members held posters and signs voicing their opposition against the government's share sales in front of the podium while Wang was briefing scores of interested investors about the benefits of buying Chunghwa Telecom stocks.

"We oppose the heavy-handed manner with which the government wants to sell off national property cheaply, thereby enriching business conglomerates," read the posters, which were also distributed to members of the audience attending the meeting.

Despite the union's repeated efforts to stop the sales, Chunghwa Telecom chairman Hochen Tan (賀陳旦), president Lu Shyue-ching (呂學錦) and several high-level executives have already embarked on a road show in Hong Kong, Singapore, Japan and Europe to promote the company's ADR sales.

Meanwhile, Chunghwa Telecom vice-president Chang Feng-hsiung (張豐雄) said that the company activated "emergency measures" to deal with any disruptions caused by the planned strike. He said that if a strike is unavoidable, the company will try its best to maintain services.

"I guarantee that Chunghwa Telecom will do whatever it can to prevent subscribers' rights from being compromised under any circumstances," he said.

Jonathan Liao (廖俊傑), an analyst with SinoPac Securities Corp (建華證券), said it is expected that the company can successfully be privatized this week, which will help pump nearly NT$100 billion (US$3.14 billion) into state coffers to help the government put a brake on its rising budget shortfall.

But because of the labor union's protest, the company's share price will lose momentum in the short term and do more harm than good, he said.

Chunghwa Telecom shares fell nearly three percent to close at NT$61.5 yesterday on the Taiwan Stock Exchange.
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