South Korean strike threat

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Monday, 6 November, 2000, 07:39 GMT South Korean strike threat

Daewoo workers protest against creditor pressure on their bankrupt company

South Korea's trade unions have threatened protests and strikes, in an attempt to prevent mass lay-offs at some of the country's largest companies. Huge debts have pushed many companies close to or beyond the brink of bankruptcy, among them the country's largest building firm, Hyundai Engineering and Construction Corporation, and car maker Daewoo Motor.

On Friday, banks and other creditors declared 52 companies "non-viable" and announced plans to close them down, sell or merge them.

Hyundai Engineering was thrown a financial lifeline, but the rescue is dependent on a "detailed and acceptable restructuring plan", said Finance and Economy Minister Jin Nyum.

The construction firm and its subsidiaries and sub-contractors employ about 100,000 people between them.

200,000 jobs under threat

According to the Dongwon Economic Research Institute, the closure of all 52 firms could put up to 200,000 people out of a job.

South Korea's unemployment rate currently stands at 3.65%, with about 800,000 people on the dole.

The government believes that only the liquidation or quick sale of most of these firms can prevent a meltdown of both the country's manufacturing industry and its financial sector.

But the trade unions say creditors should back off and keep the ailing firms going.

Shin Un-jik of the Korean Confederation of Trade Unions said trade unions did "not oppose the restructuring of ailing firms. We are angry because just workers have been forced to make sacrifices."

Protests and strikes

"We will fight back to protect our rights against massive job losses caused by the government's unilateral action", Mr Shin said.

His organisation plans a first rally on Tuesday outside the Financial Supervisory Commission, the government organisation in charge of economic reform.

The rival Federation of Korean Trade Unions, the country's largest labour organisation, has scheduled strikes and protests starting on 8 December.

The trade union representing the 17,500 workers at Daewoo Motor announced its "strong opposition" to the restructuring plan for the car maker as well.

The union says creditors should first pay workers outstanding salaries of about $100m, before there could be any job and wage cuts.

However, Finance and Economy Minister Jin Nyum has already warned trade unionists that Daewoo Motor could be closed for good if the restructuring does not get the go-ahead quickly.

Daewoo Motor's management plans a cost-cutting programme that could save up to $790m, partly through 3,500 job losses, partly through a reduction in car production.

http://news.bbc.co.uk/hi/english/business/newsid_1009000/1009168.stm

-- Martin Thompson (mthom1927@aol.com), November 06, 2000


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