FYI repost S.Korea labour strife heats up, markets fall
Reuters Story - February 12, 1998 05:42
(Adds Hyundai firms going on strike, updates markets)
ÿÿÿ By Yoo Choon-sik
ÿÿÿ SEOUL, Feb 12 (Reuters) - Tensions heated up on Thursday in
South Korea after a labour umbrella group said it would go ahead
with a strike on Friday, and financial markets dived on fears
that the labour strife could ignite a fresh financial crisis.
ÿÿÿ Unions from two major heavy-industrial units in the Hyundai
Group [HYGR.CN], the country's largest conglomerate, ignored a
warning from the state prosecutor's office and confirmed they
would down tools from Friday afternoon.
ÿÿÿ Union officials at carmaker Hyundai Motor Coÿ and
container maker Hyundai Precision and Industry Co
said their combined 40,000 members would walk out.
ÿÿÿ "We will go on strike from 1.00 p.m. (0400 GMT) tomorrow
according to the KCTU's (Korean Confederation of Trade Unions)
decision," Park You-ki, senior official of Hyundai Motor's
union, said from the southeastern city of Ulsan.
ÿÿÿ Earlier the Prosecutor-General's Office said in a statement
the strike was illegal and warned that those participating in
strikes would face severe punishment.
ÿÿÿ The statement said the strike was illegal because it was not
related to matters that could be settled by employers but to
legislation currently being reviewed by the parliament.
ÿÿÿ The 550,000-strong KCTU said in a statement that about
100,000 of its members planned to walk out on Friday at 67 work
sites nationwide, including the two Hyundai firms.
ÿÿÿ But a Labour Ministry official said less than 10,000 workers
were expected to actually down tools, based on information it
had collected by Thursday afternoon.
ÿÿÿ Late on Thursday KCTU leaders were discussing detailed
action plans to be taken on Friday, which a senior KCTU official
described as a "very painful" debate.
ÿÿÿ "Our leaders were continuing a very painful discussion over
the planned strike," the senior KCTU official, Chung Sung-hee,
told reporters during a short recess of the discussion.
ÿÿÿ But he did not make it clear whether issues under discussion
included cancelling or delaying the planned strike.
ÿÿÿ Political analysts said the strike has little popular
support at a time the country is trying to clamber out of
economic crisis.
ÿÿÿ "It's suicide for labour because not many people are going
to follow the call for a general strike. So it won't look like
much of a general strike," said Korea University political
science professor Kim Byung-kook.
ÿÿÿ Financial markets tumbled -- before rebounding -- on fears
that the desperately awaited recovery of the economy from a debt
crisis would be delayed by industrial action.
ÿÿÿ Stocks fell more than four percent at one point, with the
composite index tumbling below the psychologically important
500-point barrier to hit 497.27. It ended down 1.47 percent, or
7.65 points, at 512.49.
ÿÿÿ "Investors are more concerned that strikes will hurt our
credibility with foreigners, making rollovers of debt difficult,
rather than the strikes themselves," said Seoul Securities
broker Kim Young-bum.
ÿÿÿ Despite a relatively abundant supply of dollars, the won
currency closed weaker against the U.S. unit as the labour issue
depressed overall trading sentiment.
ÿÿÿ The won closed trading at 1,625.0 against Wednesday's close
of 1,600.0, after briefly hitting a low of 1,640.0.
ÿÿÿ The KCTU wants a renegotiation of an agreement reached last
week between labour, business, and government representatives --
including KCTU leaders -- to revise laws making layoffs easier
and accelerating reforms of Korea's business conglomerates.
ÿÿÿ The KCTU insisted the agreement called for too much
sacrifice from workers while allowing chaebol to give up too
little in their restructuring.
ÿÿÿ The agreement was a crucial element of South Korea's
economic reforms mandated under the International Monetary
Fund's record $58.35 billion rescue package agreed in December.
ÿÿÿ Economists have said much slower economic growth, tighter
liquidity controls and another slew of bankruptcies are expected
to throw more than a million people out of work this year.
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