Korean workers offer wage cuts to save jobs

August 13, 1998

Korean workers offer wage cuts to save jobs

By Eva Cheng

On August 6, the occupation by about 3000 workers of Hyundai Motors' key plant in Ulsan entered its 18th day. Hyundai Motors is South Korea's biggest car maker.

The workers are trying to defend the jobs of 1596 workers who were sacked on July 31 in Hyundai's bid to "save costs". More than 1000 workers from a list of 2678 jobs to be lost, released on July 20, were spared the sack because they opted for "voluntary retirement".

Added to retrenchments under other pretexts, Hyundai Motors has cut its work force by 4068 since July 20. Yet it still plans to sack at least 5000 more before the end of the year.

Trying to save the 1596 jobs and job security for the rest of Hyundai's work force of more than 40,000 workers, the Hyundai union offered on August 5 to accept a cut in wages to a "rational" extent and raise productivity until July 2000.

Hyundai management had not accepted the deal as of August 6 but announced a resumption of production, halted since July 20, on August 10.

The Hyundai union's offer resembles the wage-freeze and cut in benefits offered by the union at Daewoo Motors — with the approval of 72% of its members.

Daewoo management accepted the offer on August 4. Daewoo was to sack 2995 of its 19,182 workers, but the plan has now been called off.

Meanwhile, Hyundai management has threatened to sue the union for 220.4 billion won (US$175.7 million) in damages, claiming the plant shutdown since May has inflicted production losses of 612.2 billion won — 68,260 unproduced cars. Suppliers and subcontractors have lost 499.13 billion won.

More jobs are to go. In July, it was revealed that more than 10,000 bank jobs are to be lost. On August 4, South Korea's Planning and Budget Commission unveiled plans to sell or merge 46 state firms by 2002, which will involve cutting 28,813 jobs.

The Hyundai July sackings are the first major attack on jobs in South Korea since the government pushed through laws in February that legalise job cuts to protect the bosses' profits.

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