Gucci Labor Dispute: Cheap Manpower Cost Makes Management Unbalance.

"To drink water to apply, to report to the toilet, shop lost everything, all employees' sitting" compensation, pregnant women in the store to eat supplement

For now, despite the reconciliation between employers and employees, the matter of concern has come to an end, but in the past two years,

Ouyang Kun, China's chief representative of the World Luxury Association, said: "the cost of production in developing countries is much lower than that of the European luxury enterprises. If they pursue profits too much, they will easily pform the management system.

This incident has sounded the alarm for luxury brands in China, so that they can better treat China's labor force instead of just doing deals. "

"Sweatshops" become foreign brands

Looking back, in fact, this is not the first time Gucci has been accused of being a sweatshop.

As early as February 2008, the Losangeles Times reported that dozens of luxury brands, including GUCCI, employ a large number of Chinese laborers in Italy's Tuscan factory, but only pay them very low wages, and the working environment is also very bad.

Coincidentally, many well-known foreign brands have been involved in the scandal of sweatshops in the past two years.

For example, in July this year, the brand Converse of NIKE, a sports brand, was complained of abusing employees in Indonesia's factories.

According to the Hongkong Wen Wei Po, the malpractice involves two factories, one of which employs more than 10 thousand workers, who can only get 50 cents per hour, and are often punished by violent punishment. Even if they have a doctor's certificate, they can not get sick leave and are always at risk of being dismissed.

In this regard, NIKE acknowledges that the workers in these two factories have suffered serious physical and verbal abuse, and other production lines have had similar incidents.

In August this year, an investigative television program in Brazil exposed the clothing brand ZARA, pointing out that its workers in Brazil's more than 30 outsourced factories were engaged in "slave like" jobs. Workers worked in dirty and messy workshops for about 14 hours a day and worked 7 days a week.

After speaking, the ZARA company also admitted that there was such a situation in Brazil factory, and promised that similar incidents would not happen again.

"GUCCI is not the first one, not the last one."

Gu Jun, Professor of the center for social pformation and social organization of Shanghai Univer, said that similar sweatshops undoubtedly sounded the alarm for many multinationals, and the maintenance and improvement of labor rights must be given enough attention.

Cheap labor costs make management unbalance

"When multinational enterprises expand their overseas markets, the obvious cost advantage of developing countries is like a double-edged sword."

Zhu Ping, senior analyst at Bibo management consulting company, told reporters.

In the view of Zhu Ping, China once won the "China made" trump card by "the cheapest laborers in the world", and cheap labor and demographic dividend also enabled China to leap into the second largest economy in the world. However, the price behind this is "we know it well."

"Let's not see that multinational corporations have their own interests in this country, but as long as they are enterprises, their ultimate goal is to gain maximum benefits.

When our country's labor force is very rich, and the rights and interests of workers can not be fully protected, the multinational corporations will reveal the nature of profit seeking and exploit the profits of laborers to the maximum extent. That is why these enterprises frequently fall into "sweatshops" scandals in China and even in developing countries.

Zhu Ping said.

In view of this, a human resource expert of talent network also agrees.

He told reporters: "multinational companies in this country to protect themselves is not really a role as a justice envoy, can take the initiative for the interests of the broad masses of workers, but under the constraints of social environment and system, they have no other choice."

Take Gucci as an example, according to Ouyang Kun's analysis, Gucci's products in China are mainly canvas fabrics, which are much lower than those of some developed countries, and the cost of manpower is far lower than those of developed countries, so that their profit margins in the Chinese market are higher.

"In the market price of a Gucci product in China, raw materials account for about 5%, processing costs are about 10%, advertising and public relations activities cost about 10%, flagship stores' annual cost and team cost are about 15%, and the deduction is about 20% of the comprehensive tax rate, and the remaining 40% are Gucci's retained parts."

Obviously, high profits undoubtedly have a fatal attraction to numerous overseas enterprises.

In 2004, Gucci began to exert its strength in the Chinese market. At that time, it had only 4 stores in the mainland of China, but as of now, the number of stores has reached 45, and this has not yet included some new shops under construction.

At present, China has become the world's second largest consumer of luxury goods, and according to the World Luxury Association's prediction, by 2015, China will also become the world's largest consumer of luxury goods.

"How to make a choice between cost temptation and scientific management will be the problem that many foreign brands need to solve in developing overseas markets, especially in developing countries."

Zhu Ping said.

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Perfecting order is the fundamental solution.

The "Gucci was the employee complaints" incident, in the mediation of the Shenzhen Federation of trade unions, the resignation staff and Gucci China company after more than ten days of consultations, in October 25th, Gucci issued a final statement, "we are very pleased with several former Shenzhen employees reached a settlement.

After fully considering the demands of the former employees and the feedback from all sectors of society, we finally reach a reasonable settlement plan.

At the same time, Gucci promised to "continue to strengthen its business management capabilities and organizational structure in China, improve employee benefits, training and other management systems."

In fact, enterprises like Gucci have built up a relatively perfect management system in their local and global expansion for many years, and have formed a relatively perfect system in the aspects of humanized management, employee welfare protection, communication channels between employees and enterprises, and consultation mechanism.

From this perspective, what foreign brands lack is not the management system or management level, but effective regulation.

"Actually, the real problem faced by Chinese workers today is not the specific behavior of any foreign enterprise, but the general lack of labor market order."

Talking about the reasons why "famous enterprises" often mistake themselves outside the local market, Gu Jun said.

In Gu Jun's view, China's economic development is quite different today. Although foreign investment is still needed, it is no longer thirsty. Although foreign management experience is still needed, no longer blindly worship.

"Under such circumstances, the public's questioning and complaints about well-known companies and brands such as GUCCI highlights the increasingly objective, peaceful and picky attitude of the whole society towards foreign investment, foreign enterprises and foreign brands, and people are increasingly unable to accept any form of" super national encounter ".

Gu Jun believes that the enterprises run in China and products sold in China, regardless of domestic capital, foreign capital or joint venture, must bear the responsibilities of employees, consumers, and society in the same regulatory framework and legal framework.

From legislation, law enforcement, public opinion to workers and consumers, we need to work together to create an overall environment that enables enterprises to standardize their operations, assume responsibilities and cherish their image.

This is the requirement of China's economic pformation and upgrading, and is the requirement of China's further integration into the world.

In this regard, Zhu Ping agrees and adds: "when the rights and interests of others are violated, the parties themselves should find solutions. When a considerable part of the workers' legitimate rights and interests are not guaranteed, how to find solutions should be included in the government's work day."