On Tuesday, a spokesman of the Jilin Province iron factory, where about 1,000 workers erupted in a protest that killed one on Friday, denied reports that the protest actually involved 30,000 protesters.

Zhang Zhidong, spokesman of the Tonghua Iron and Steel Share-Holding Co., said production temporarily halted by a worker protest sparked by merger fears resumed Saturday, while police are still investigating the death of the manager killed during the protest.

Zhang has said that the protest could not have involved 30,000 people, as reported by Reuters on July 26 and AFP on July 27.

"The share-holding company is the core production subsidiary of the Tonghua Iron and Steel Group. We only have 13,000 on the pay-roll," he said.

A work group organized by the provincial government to investigate the incident said the manager, Chen Guojun, was dispatched by the Beijing-based Jianlong Heavy Machinery Group to conduct a merger discussion to take a controlling share in the Tonghua Iron and Steel Group.

Wang Xidong, deputy head of the Jilin Provincial State-owned Asset Commission, said changes in share ownership discussed in the merger plan would only directly affect managerial personnel changes, rather than rumored payroll cuts that stirred workers into protest.

According to police, around 1,000 protesters gathered in the company's office building on Thursday morning. The protest turned violent as they rushed to stop the production line, injuring Chen.

An injured Chen retreated to a worker's dormitory, but was discovered by a small group of protesters who beat him repeatedly while others threw bricks toward arbitrators and police to thwart rescue.

Chen died in hospital at the 11 p.m. Thursday.

Jianlong has become Tonghua's second largest share-holder since 2005.

"The provincial government has agreed to terminate the merger discussions after the protest, and the company's production has been resumed," said the spokesman Zhang.

Workers with the company said they feared that Jianlong, a private company, would soon introduce a downsizing after it takes control of the company.

"Jianlong stopped the merger discussions at the beginning of this year, when our company suffered losses amid the financial crisis. It resumed the talks, as the company's business recovered. Why should we let such a private firm to take control of us," said a retired worker Zhang Guanghui.

Another worker, Sun Dejun, said worker salaries have not increased in the past three years since Jianlong took shares in the company.

"Jianlong has always called for payroll cuts to prove efficiency. Workers have been kept worrying about their job security," he said.

"I retired at the age of 39 from the company this year. I now live on my retirement pension of 1,000 a month, which is in sharp contrast to the yearly pay of 100,000 yuan for mid-level managers in the company," said a worker who declined to give his name. He said he began to petition against the merger in March.

Wang, the state-owned asset commission official, said the Tonghua group company, the largest state asset in Jilin, had accumulated a deficit of 900 million yuan in the first three months of this year as the iron and steel business became one of the country's hardest hit industries amid the sweeping global finnancial crisis.

However, the company with annual production ability of 7 million tons saw business recovery in June, when it reported 40 million yuan in profits. The profits doubled to 80 million yuan in July.

"The merger had been approved by the provincial government, which is expected to help Tonghua reach the development goal of reaching 10 million tons in annual throughput," he said.

However, workers from state-owned firms, especially retired workers had believe that state-owned firms are "iron rice bowls" that can guarantee lifelong employment and secure pay, even after retirement. They opposed the merger, which would allow a private firm to disillusion their dream, said Wang.

(Xinhua News Agency July 28, 2009)