Posted on : Sep.7,2006 14:00 KST
Modified on : Sep.8,2006 16:16 KST
Reform delay a boon for Samsung, bane of Hyundai
South Korea’s two largest conglomerates are showing sharply different responses to a recent decision between the labor and business sectors to delay the introduction of a road map aimed at enhancing labor-management relations. Samsung Group welcomed the move, while Hyundai Motor Corp. has expressed unhappiness.
Such disagreement is the first of its kind between the nation’s two most powerful firms when it comes to labor issues.
The Federation of Korean Trade Unions, an umbrella labor group, and the Federation of Korean Industries (FKI), a business lobby group, agreed earlier this month to put the labor-management road map on hold for five years. The key elements of the road map include allowance of multiple labor unions at one company and a ban on a company having to pay the salary of full-time company union workers.
Samsung Group’s reaction is thought to stem from the fact that it currently does not have union representation of its workers, so it does not have to worry about compensating full-time union employees.
In addition, the continued allowance of a single union at a firm comes as a boon to Samsung. Many of Samsung’s affiliates have been busy forming management-friendly unions in order to prevent a militant union from organizing. Now, Samsung and its affiliates do not have to worry about competing, anti-management unions from forming.
"We were concerned that the introduction of the road map would make it more difficult to block the formation of pro-labor union groups," a Samsung official said. "The five-year suspension [on the road map] is no bad news."
By contrast, Hyundai Motor Corp. had quite a different reaction to the road map’s postponement. The nation’s largest automaker is famous for its 40,000-strong militant labor union group, which spearheaded walkouts at the company for the past 18 years in a row. With the road map, which says that a company do not have to pay wages to full-time union workers representing that company’s workers, Hyundai had expected to save as much as 11.6 billion (US$12 million) annually.
"The FKI had assured us that we did not have to worry [about the road map being put through]. But now we feel betrayed," a Hyundai Motor official said.
According to insiders, some Hyundai officials even suggested withdrawing from the FKI.
The FKI countered that the agreement to delay the road map’s introduction will benefit all of business, though it would not satisfy all individual companies. It also dismissed allegations that the move is intended to help particular companies, such as Samsung.
Many industry experts say the delay in introdcuing the road map will benefit such companies as Samsung and POSCO which do not have union groups, but come as a burden to others struggling to cope with already-established, militant labor unions.
