Read this article in:
7 September, 2009
A summer-long Korean labour dispute that spiraled into a 25 August lockout by Kumho Tire Co. at three manufacturing plants was resolved Saturday, 5 September, when South Korea’s second largest tyre maker and the Kumho Tire Workers’ Union of the Korean Metal Workers’ Union (KMWU) reached a compromise settlement.
That compromise will preserve 733 of 4,000 jobs that Kumho had proposed be cut. The union, in turn, will extend a 2008 wage freeze through 2009. The Kumho Tire Workers’ Union also agreed to forego scheduled 2008 bonuses, with talks over 2009 bonus schemes to be held in the first quarter of 2010.
The dispute began in June when management demanded another wage freeze, non-payment of bonuses, a job-sharing plan that would cut work hours, thus reducing salaries between 20-to-30%, and the redundancies, totaling 18% of the entire workforce. The union then began a series of industrial actions, and was prepared to escalate job actions after Kumho reported its restructuring plan to the Ministry of Labour on 24 August.
Instead, the company imposed lockouts at tyre facilities in Gwangju, Gwanngju province, Gokseong, South Jeolla province, and Pyeonggtaek, Gyeonggi province. When Kumho lifted the lockouts some ten days later, workers embarked on sit-in strike actions. Those ended at the weekend with the negotiated compromise.
The union also retreated on a “no work/no pay” demand by Kumho for the strike days, and salaries will not be paid during periods of strike. The dispute mirrored some of the negative results from the recent Ssangyong Motor struggle.
Kumho Tire is part of the conglomerate Kumho Asiana Group, a holding company that took on massive debt in 2006 with the purchase of Daewoo Engineering & Construction Co. The group’s debt-to-equity ratio rose five-fold and Kumho has tried to reduce debt by reducing labour costs.
Kumho Tire has severed its workforce by 130 each year since ill-advised purchase of Daewoo, but last year, in July, a four-day strike by the Kumho Tire Workers’ Union convinced the company to withdraw 431 announced redundancies. In the past year, however, Kumho opened its second plant in China, a truck and bus tyre facility in the city of Nanjing.
The Tire Workers’ Union, through the KMWU, is affiliated to the Korean Confederation of Trade Unions (KCTU).