When Lee Bum-yeon lost his job along with nearly 2,000 other union workers in 2001 after South Korea’s Daewoo Motor went bankrupt, his neighbors at supermarkets and bakeries gave his young daughters free snacks and bread.
BUPYEONG, South Korea (Reuters) — When Lee Bum-yeon lost his job along with nearly 2,000 other union workers in 2001 after South Korea’s Daewoo Motor went bankrupt, his neighbors at supermarkets and bakeries gave his young daughters free snacks and bread.
“People felt sorry. People felt heart-broken. They were worried how we were going to make a living,” 55-year-old Lee said.
Now, with General Motors cutting some 2,600 jobs and threatening to leave South Korea in the absence of steep union concessions, the once sympathetic public is nowhere to be seen.
“I don’t think anyone is feeling for us anymore,” a grim-faced Lee, who was rehired by GM a year after it bought Daewoo in 2002, told Reuters outside GM’s Bupyeong factory near Seoul.
South Korea’s reputation for militant unions and rigid labor practices have long been cited as contributing to high labor costs and a persistent discount for corporate Korea. Shares of South Korean companies are typically undervalued in comparison to their global peers, a phenomenon known as the “Korea Discount”.
Now, like unions in other major auto producing countries, Korean labor leaders are under pressure to make concessions as automakers look to shift jobs and investment to countries with lower costs.
“I expect militant unions to become more reasonable, which would lead to enhanced labor flexibility,” said Kim Sung-soo, a fund manager at LS Asset Management. “Unions have learned a lesson from past incidents where they can lose all if they go militant.” DEMOCRACY TO MILITANCY
Unions at large firms spearheaded South Korea’s fight for wages and basic labor rights against powerful family-run conglomerates known as chaebol, during the country’s rapid industrialization in the 1980s and 1990s.
They also led South Korea’s democracy movement under then authoritarian governments, enjoying backing from non-unionised workers at small firms and the broader public.
But the power and influence of the unions has been weakening. Much of the public now seeing them as an “interest group which seeks to maximize their own interest”, said Kim Tai-gi, an economics professor at Dankook University in Seoul.
