A labor union in Shanghai said Saturday it is closely watching labor relations during the relocation of Intel's Shanghai test factory to Chengdu in southwest China.

Cai Xuekang, vice director of the legal department of the Labor Union Confederation of the Pudong New District, said it has set up a team to work with local authorities on the matter.

Intel Corp, the world's biggest computer chip maker, announced Thursday that it planned to close its assembly and test plant in Shanghai Pudong and move those operations to Chengdu, a lower-cost region, in the coming 12 months, a move that will affect 2,000 employees in Shanghai.

It said employees in Shanghai may apply for positions in the Chengdu and Dalian factories. But many are expected to lose their jobs.

Cai said that the union will coordinate with all concerned parties and supervise the closure of the factory and the lay-off of workers.

The labor union of Intel Shanghai said that it will do its best to protect workers' interest in negotiating the compensation package for workers. The union will report the latest development to higher union organizations every two weeks.

Cai said that the enterprise should take into full account the difficulties the employees may encounter amid the global financial crisis, and create employment opportunities for them.

Intel Shanghai said that it will abide by Chinese law in dealing with any problems arising from the plan.

Last month, Intel said it planned to cut up to 6,000 manufacturing jobs as falling demand meant its factories were operating at less than capacity. The company said it would close five plants globally: two in the United States, two in Malaysia and one in the Philippines.

(Xinhua News Agency February 8, 2009)