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3 December, 2000The Daewoo Motor Co. Workers' Union has agreed, on a provisional basis, to future plans offered by the company, and a delegation representing the rank-and-file have given unanimous approval.
KOREA, REP: On November 27, 2000, the trade union representing workers at Daewoo Motor Co. and the management of the auto company agreed that Daewoo is in need of an adjustment programme to cope with the current crisis at the auto firm. This plan will include the business structure, component and product prices, and workforce.
Points of the agreement state that:
(1) workers and the employer shall establish a joint committee for the reform of Daewoo Motor Co.;
(2) workers and the employer shall do their best to put together a self-rescue plan as soon as possible and find the most effective measures to implement the plan based on mutual cooperation;
(3) the company shall do its best to clear back wages and retirement funds and normalise business by seeking financial support from creditors;
(4) workers and the employer shall make efforts to build mutual trust.
In a separate agreement, workers and the employer decided to promote the establishment of a four-way committee which will include the additional participation of the government and creditors. Also, matters covered in the existing collective bargaining agreement shall be recognized in supplementary collective bargaining.
Regarding layoffs, the union and management did not agree on when or how many workers will be dismissed. The union only agreed on the necessity of an adjustment plan in general, to normalise the company, and said it is important to organise workers who came back to work after the agreement was made. With the union's participation in the joint committee, it will look for other ways to reduce production costs, instead of one-sided forced layoffs.
With an estimated debt of US$10 billion, Daewoo, South Korea's former No. 2 auto company, was declared bankrupt by its 24 creditor banks on November 8. The company was forced to close its main plant and apply for court receivership. On November 29, the creditor banks accepted to keep the auto company afloat. Daewoo and its contractors will be receiving 728 billion won (US$606 million) in the next 7 months so that suppliers are paid and the plants can continue operating, with 90 billion won coming before the end of this year so that the carmaker can purchase raw materials.
A proposed deal by Ford Motor Company to buy Daewoo Motors fell through in September, following which joint bidders General Motors and its partner Fiat have stepped into the breach. The trade union is firmly against any such sale to an overseas buyer.
Points of the agreement state that:
(1) workers and the employer shall establish a joint committee for the reform of Daewoo Motor Co.;
(2) workers and the employer shall do their best to put together a self-rescue plan as soon as possible and find the most effective measures to implement the plan based on mutual cooperation;
(3) the company shall do its best to clear back wages and retirement funds and normalise business by seeking financial support from creditors;
(4) workers and the employer shall make efforts to build mutual trust.
In a separate agreement, workers and the employer decided to promote the establishment of a four-way committee which will include the additional participation of the government and creditors. Also, matters covered in the existing collective bargaining agreement shall be recognized in supplementary collective bargaining.
Regarding layoffs, the union and management did not agree on when or how many workers will be dismissed. The union only agreed on the necessity of an adjustment plan in general, to normalise the company, and said it is important to organise workers who came back to work after the agreement was made. With the union's participation in the joint committee, it will look for other ways to reduce production costs, instead of one-sided forced layoffs.
With an estimated debt of US$10 billion, Daewoo, South Korea's former No. 2 auto company, was declared bankrupt by its 24 creditor banks on November 8. The company was forced to close its main plant and apply for court receivership. On November 29, the creditor banks accepted to keep the auto company afloat. Daewoo and its contractors will be receiving 728 billion won (US$606 million) in the next 7 months so that suppliers are paid and the plants can continue operating, with 90 billion won coming before the end of this year so that the carmaker can purchase raw materials.
A proposed deal by Ford Motor Company to buy Daewoo Motors fell through in September, following which joint bidders General Motors and its partner Fiat have stepped into the breach. The trade union is firmly against any such sale to an overseas buyer.