Reports this morning state that employees of the state-owned Tunghua Iron and Steel company, in the industrial north-east of the country, were ‘unhappy’ about plans for a proposed takeover by private sector rival the Jianlong Steel Holding Company. The deal could apparently have resulted in the loss of as many of 25,000 of the 30,000 jobs at the plant.
In fact they were so ‘unhappy’ that when the general manager of Jianlong, one Chen Guojun, pitched up last Friday to give them a pep talk, some 3,000 workers took matters into their own hands and rioted. In the course of which disturbance, the unfortunate Chen was reportedly beaten to death, and 100 other people were injured. Makes those French militants and their crazy boss-napping antics look positively small-time by comparison.
And while we can’t in all conscience recommend such a drastic course of action, it does seem to have worked – for the time being at least. The deal has been scrapped and the jobs are reportedly safe. Although to leave it at that would set a pretty unfortunate precedent, so we wouldn’t be surprised to see the Chinese authorities taking further action once the fuss has died down.
To be fair, it does sound like Chen rather badly misread the situation he was walking into. Instead of the bland and vaguely reassuring words that most M&A textbooks recommend in the circumstances – a safe if uninspiring course – Chen rather unwisely adopted a rather more provocative line. Taking the current fashion for ‘telling it like it is’ to its logical extreme, he apparently told the massed ranks of Tunghua workers who had gathered to hear their fate that most of them would be out of a job in three days time.
Coupled with the fact that he was known to be earning some £267,000 a year (around 10,000 times the average steel worker's wage) Chen’s words were more than enough to spark the rioting in which he subsequently met his end, abetted by rioters who, having first beaten him, then prevented ambulances from getting through.
It’s impossible to ignore the thought that if he had been rather more conciliatory in approach, he might still be alive. The takeover deal might still be on, too. All in all it’s a pretty sobering example of just how high feelings can run in times of great uncertainty, and of the power that leaders possess to tip the balance for good or ill, depending only on their words and actions. Surely there’s a lesson for recession-hit bosses everywhere in that?
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