During the first week of January 1960, the U.S. embassy in Saigon reported to the State Department with disappointment that the regime had just broken a major strike using military force. The strike, begun only days before, was actually part of the ongoing struggle in the rubber-growing industry to obtain an agreement between the regime and workers. The use of force to break the strike thus undermined the negotiations. Diem perceived actions such as strikes as direct threats to his family's hold on power. Official sources soon reported that some 90 percent of workers had returned to their jobs, while workers' representatives reported that barely 10 percent had come back to work. Diem's American advisors understood the potential danger in using troops to break a strike, referring to the episode as “most unfortunate.” This action certainly did not improve the regime's image among the Vietnamese or among the Americans. Far more important in the context of constructing the state, however, was the fact that the rubber sector was the major foreign exchange–earning sector in an economy desperate for any earnings independent of American aid. The regime soon followed up with “wide scale arrests” and intimidation of labor leaders. Additionally, the continued presence of troops and tanks in the area during and after the strike only fed the growing opposition to the regime.