Up to 500 employees at hi-tech giant Intel’s factory in Chengdu, Sichuan staged a one day strike last month in a protest over wage discrepancies with employees recently transferred in from the multi-national’s Shanghai facility, according to a report in China Business Journal.

The workers claimed that the employees from Shanghai were being paid up to four times more for the same production line positions.

Locally hired technical school graduates (中专) at the Chengdu factory were paid around 1,000 yuan a month, while college graduates (大专) got about 1,400 yuan, workers said. China Business Journal interviewed workers in comparable positions in Chengdu, all of whom expressed surprise at the wage levels at Intel. Even small-scale enterprises, they said, were paying about 20 percent more than Intel.

Employees’ discontent with their pay and conditions had been simmering for a long time but came to the boil when Intel’s Shanghai factory was closed and some employees were transferred (on their existing salaries) to Chengdu in the spring. On 18 August, four to five hundred employees refused to get back to the production line and stayed in the factory canteen after lunch. Management initially threatened the workers, saying their action was an “illegal strike,” and gave them just 15 minutes to get back to work. The strikers however refused to budge. In the evening, management eventually compromised and promised to give the workers a reply to their grievances by early September.

The workers’ main demands included; across-the-board wage increases for production line technicians of between US$150 and US$200 a month - to come into effect immediately and to be written into new employment contracts, - improvements in the recruitment and management system, forbidding unqualified persons from taking on supervisory roles, improving the promotion policy, and raising bonuses to the levels of the Shanghai employees.

At the time of the China Business Journal report on 5 September, management had only agreed to increase the shift duty allowance, and had failed to respond to any of the workers’ other demands.

The Intel strike reveals an unexpected problem corporations seeking to cut costs by moving production from the coastal regions to inland areas might encounter. Inland cities like Chengdu have deliberately courted hi-tech industries but they often lack enough suitably qualified and trained technicians to fill all the positions. As such, companies relocating inland will have to transfer some existing staff to the new plant. And in doing so, they will have to ensure that not only are those employees properly compensated for the disruption to their lives but also that the locally-hired employees are treated fairly too.

Intel claims on its website that “our greatest investment is our people,” and that it believes:

Employees are the most important investment for success, and Intel's comprehensive compensation and benefits program reflects that. The program's purpose is to attract, retain and reward the people responsible for the company's long-term growth and profitability. It's designed to provide Intel employees and their families with the stability of long-term financial security and protection.

The Chengdu strike indicates that Intel still has work to do in this regard.