Another foreign company leaves Shenzhen with thousands of workers dismissed

The Chinese media Securities Times reported on January 27 that in recent years, as the former manufacturing capital, Shenzhen has successively seeing moving-away some foreign-funded factories in the process of economic development and industrial upgrading, including some well-known foreign-funded factories, for various reasons.

However, to this day, the role of foreign-invested factories in the economic development and people’s livelihood of China cannot be ignored. It is still necessary to maintain the competitiveness of first-tier cities like Shenzhen.

Recently, it has been circulating on the Chinese Internet that Deheng Electric (Shenzhen) Co., Ltd. has issued a notice on the migration of some product lines. The basic content is that the cost of the trade policy and suppliers have increased due to various reasons. The group company decided to remove the KPO and KPS product lines from the Shenzhen factory at the end of January and move to India. Regarding this matter, some wemedia accounts even claimed that “thousands of workers were dismissed locally.”

It is true that the factory plans to move part of the production line, but the factory has not been evacuated as a whole, and the total number of people in the factory is only a few hundred. Sayings of “thousands of workers in the local triage” is obviously exaggerating.

According to industrial and commercial data, Deheng Electric (Shenzhen) Co., Ltd. was established in November 2011 with a registered capital of HK$12.02 million. It is a foreign-funded enterprise. The controlling shareholder of the company is Deheng (Hong Kong) Co., Ltd., whose main business scope is the production and operation of electronic pumps, etc.

Deheng Motor (Shenzhen) Factory is located in Danping Industrial Zone, Longgang District, Shenzhen. It has 4 factories B, C, D and F. The company’s motor brand is HANNING. According to the information provided by the company on the recruitment website, the HANNING motor brand was established in 1947, headquartered in Germany, with four branches in China, Europe, India, and other places and customers all over the world, establishing HANNING in its industry-leading position.

Some Deheng factory employees who entered the factory said that the factory recently planned to relocate some production lines, but not all of them. The factory is still there and the workers are still working normally.

The employee said that he is currently more worried about the factory moving, and if he moves away, he doesn’t know if he can get some compensation. At present, the related compensation issues are not yet clear.

As for the reason for the factory to relocate part of the product line, Deheng Electric (Shenzhen) stated in its official notice that it was a cost reason. The notice stated that due to China’s trade policy and the company’s suppliers, costs have increased due to multiple reasons.

According to the data from Tianyancha, Deheng Electric has been involved in several labor disputes, and the local authority has been involved in mediation. The 2018 work briefing of the street office where the company is located shows: Follow-up and mediation of disputes between employees of Deheng Electric (Shenzhen) Co., Ltd., located in Danping community, due to overtime work with the company, involving 40 employees, and the company has a total of 340 employees.

Source: Securities Times

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