China on Sunday called off the takeover of a state-owned steel plant after workers protested and trapped an official in the factory office for four days — the second time in a month that the country's steelworkers have rallied to successfully avoid privatization.
Authorities in central Henan province decided to stop the takeover of Linzhou Iron and Steel Co. Ltd. to calm workers who had protested since Tuesday against the restructuring and to demand higher compensation, the official Xinhua News Agency said.
A similar protest last month in the northeast led to the general manager of a state-owned steel plant being beaten to death. That plant's merger was called off as well.
Beijing is trying to streamline China's sprawling steel industry, the world's largest, by orchestrating a series of mergers aimed at creating globally competitive producers. The mergers, however, often come with layoffs and complaints that workers get too little severance pay.
As many as 400 workers surrounded the Linzhou company's offices Tuesday and prevented Dong Zhangyin, an official from the local branch of the State-Owned Assets Supervision and Administration Commission, from leaving, the Linzhou city government said in a notice on its Web site Saturday.
Xinhua said the demonstration involved as many as 3,000 people when it started. It said armed police were deployed to clear out the workers, although a local official told The Associated Press the workers left voluntarily early Saturday after the government persuaded them to go.
The Linzhou plant was sold last month to Fengbao Iron & Steel Co. Ltd., located only half a mile (a kilometer) away, Xinhua said. Massive layoffs followed, and workers were to get just 1,090 yuan ($159) for each year of service, the report said.
Sunday's decision called for production at the plant to resume as soon as possible, while a new official was put in charge of the team working on the plant's restructuring, Xinhua said.
It cited local authorities as saying workers should have more say in deciding their benefits and the factory's future.
Calls to the Henan provincial government's information office, as well as both steel companies, rang unanswered Sunday.
