By Eva Cheng
Top South Korean car manufacturer Hyundai Motors' August 24 deal to reduce scheduled job cuts from 1538 to 277 has ended a 35-day occupation of its Ulsan main plant by several thousand workers. However, it provoked widespread condemnation by other bosses.
The deal "suppresses" "lawful" lay-offs, the big employers' organisation, the Federation of Korean Industries (FKI), charged in a statement soon after the settlement.
It "set a bad precedent that legitimate lay-offs can be blocked by the strikes of militant labour unionists", warned the Korea Employers Federation in its statement.
The main opposition Grand National Party's leader, Kim Moon-soo, lamented that the "principle of lay-offs has been compromised" and would almost certainly delay "economic restructuring" (the brutal cuts in jobs, wages and conditions demanded by Korean capitalists).
Park Tai-joon, president of the United Liberal Democrats, junior partner of the ruling coalition headed by the National Congress for New Politics (NCNP), also regretted that the settlement which the NCNP had brokered had not cut enough jobs.
"It's very bad for Hyundai, for corporate restructuring", Steve Mavin, research head of stock broker Jardine Fleming Securities, complained.
"Korean companies as a whole have lost. If their unions are watching this, they see they have something to gain by being militant", said Hank Morris, director at Industrial Research Consulting.
Under the "good deal" that these bosses and their hangers-on are screaming about, 277 of the workers who chose to fight for their jobs will still be sacked. Also gone are 2678 workers who took "voluntary retirement".
The other 1261, instead of being sacked, will be on an 18-month unpaid leave, during the last six months of which they will receive unpaid retraining. That a job will be available to the retrained workers is implied, but not guaranteed. Even less clear are the future terms of employment.
In addition, Hyundai's existing charges, for alleged damages and violence, against unionists will be dropped, and the 277 dismissed workers will gain the "opportunity" to be hired by other outfits of the Hyundai group, on top of severance payments.
However, Hyundai Motors' additional pledge of no more lay-offs for the next two years means that the 7500 other jobs scheduled to be removed in 1998 will be saved. An FKI spokesperson said in late August that Hyundai needed to lay off about 18,700 workers because of a sales slump and escalating excess capacity.
The striking workers had high hopes that all jobs could be saved. That was their fighting goal until the very last days of the negotiations, under the continuing pressure of 15,000 riot police armed with water cannons, tear-gas trucks and bulldozers a stone's throw from their barricade. According to the August 24 edition of PICIS Newsletter, some disguised workers burned flags and other materials in protest against the settlement.
According to the Korean Confederation of Trade Unions, by August 18, about 8600 of Hyundai Motors' 45,000 workers had been forced to take "voluntary termination" while the remaining workers suffered an average wage cut of 400,000-600,000 won ($530-800) per month.
In a desperate bid to save jobs, the Hyundai Motors union has proposed further wage cuts, reduced working hours and taking leave by turns (at half pay, which would bring wages below the legal minimum).
Though at a price and against tremendous odds, the Hyundai struggle scored real gains in reducing job cuts — not only there but also possibly in other industries. It forces other bosses to think twice before contemplating further job cuts. According to Hyundai Motors, strikes and shutdowns have inflicted on it 905.6 billion won ($1.2 billion) in production losses since May 27.
An economist with the FKI blamed the Kim Dae-jung government for blocking the bosses' ability to sack workers at will, as they are entitled to do under the repressive labour laws which the government pushed through in February.
He also expressed concern that the Hyundai precedent would complicate the upcoming restructuring of the top five conglomerates. The plan for its first phase is scheduled to be launched on September 10, and the "streamlining" and swapping of units among the five, as well as substantial job cuts, are expected.
Due to other government-sponsored "reforms", the Federation of Korean Trade Unions expects 200,000-300,000 more jobs to go in coming months, half of them from the banking and insurance industries.