Adidas AG is moving some production away from Yue Yuen Industrial Holdings Ltd’s (裕元工業) shoe factory in Dongguan, China, where a strike over benefits and pay disrupted output for a ninth day.
“In order to minimize the impact on our operations, we are currently reallocating some of the future orders originally allocated to Yue Yuen Dongguan to other suppliers,” Adidas spokeswoman Katja Schreiber said on Wednesday by e-mail.
The Herzogenaurach, Germany-based sportswear maker “has a highly flexible supply chain in place,” she said.
Sports and casual shoe brands including Nike Inc, Asics Corp, New Balance Athletic Shoe Inc, Puma SE and Timberland Co are made by Yue Yuen, the world’s biggest branded footwear maker and operator of the 1.4 million square meter Dongguan complex in Guangdong Province. Employees at the complex, where more than 40,000 people work, are striking in a dispute over compensation that has extended to a ninth day.
Yue Yuen is “still committed” to maintaining production in Dongguan and declined to comment “about any particular customer,” George Liu (劉鴻志), spokesman for the Hong Kong-listed manufacturer, said by e-mail.
The company had 423,000 employees as of 2012 and factories in China, Vietnam and Indonesia, according to its Web site.
Adidas said its supplier, Yue Yuen parent Pou Chen Group (寶成集團), a Taiwan-listed shoe and materials company, is “in discussions with local government and the trade union federation to seek ways to address the concerns expressed by the workers.”
Nike and Adidas are the main clients for the Dongguan factory, Liu said by telephone yesterday, confirming that the strike extended into its ninth day.
The shoemaker is engaging with workers, the local government and the unions, Liu said.
Greg Rossiter, a spokesman for Nike, on Wednesday reiterated that the Beaverton, Oregon-based company is monitoring the labor dispute and production at Yue Yuen.
Some equipment at part of Yue Yuen’s Dongguan factory was being removed and put into trucks, monitoring group China Labor Watch reported on its Web site on Wednesday.
“Adidas made a decision to pull out or relocate molds at a time when doing so deeply concerned workers,” Kevin Slaten, China Labor Watch program coordinator, said by e-mail yesterday. “It is important that Adidas consider workers’ perception and interests before taking action like this.”
Yue Yuen is offering to add a monthly living allowance of 230 yuan (US$37) at its factories in southern China starting on Thursday next week. The company is offering to bring forward to next month a welfare plan originally scheduled for next year, Liu said.