Unionized Workers Taking Advantage of Labor-friendliness of Moon Administration

Some labor unions in South Korea are causing controversy by making unreasonable demands regardless of adverse business conditions and the money of taxpayers spent to save their companies on the verge of collapse. Critics say their recent behaviors are intended to take advantage of the labor-friendliness of the Moon Jae-in administration.

In the morning of July 9, unionized non-regular GM Korea workers in Bupyeong occupied the office of president Kaher Kazem to hold a sit-in protest. Earlier, the Ministry of Employment and Labor told the company to directly hire 774 in-house subcontractor workers by July 3, ruling that the Changwon Plant of GM Korea violated the Act on the Protection of Dispatched Workers. GM Korea said that those are permanent employees working for subcontractors and it cannot directly hire them in view of the difficulties it is facing.

In the meantime, multiple lawsuits are ongoing between unionized regular workers in GM Korea and the company, with the former claiming that the latter should pay approximately 800 billion won in ordinary wages. Losing the case is likely to be a final blow for the company, which had its life extended two months ago by means of a 7.7 trillion won investment from GM and the Korea Development Bank after chronic financial difficulties.

The public fund that has been poured into Daewoo Shipbuilding & Marine Engineering exceeds 13 trillion won, including 4.2 trillion won in 2015 and 6.7 trillion won in March last year. The shipbuilder had to spend 700 billion won in public funds last year due to its shortage of cash. Still, unionized workers in the shipbuilder are considering going on strike for a 4% increase in base pay and more welfare benefits.

In Hyundai Motor Company, whose operating profit has dropped from more than 10% to 3% or so, workers are about to go on strike for seven years in a row. In 2016, the company’s labor cost-to-sales ratio was as high as 15%, close to double that of Toyota. Its export to the U.S. cannot but stop once the U.S. imposes a 25% tariff on imported cars. Yet, the workers are demanding a 5.3% increase in base pay along with a bonus equivalent to 30% of the company’s net profit.