Who won epic South Korean factory battle?

Picking his way past the ranks of riot police and the barricaded factory gates, it was Ssangyong’s chief financial officer who came out to break the news to the waiting journalists.

“The 77-day strike is over,” he said.

“Are you relieved?” I asked.

“It may have come a bit late,” he replied, “but we’re glad it has ended peacefully.”

Medieval battle

At times over the past few weeks, the Ssangyong Motor plant has looked less like the venue of a labour dispute and more like the scene of medieval battle.

Hundreds of workers had holed themselves up in the company paint shop, a building packed with flammable material.

They were defending their position using giant homemade catapults, firebombs and, if needed, sticks and fists in hand-to-hand combat with the riot police.

The police, in turn, were quite literally trying to flush the strikers out with tear gas, dropping it by the gallon from helicopters hovering above the building.

So just how did it come to this and what does it tell us about the state of South Korea’s labour relations?

In one sense Ssangyong’s troubles are unique.

It is the smallest of South Korea’s car makers, and it specialises in making gas-guzzling sports-utility vehicles, including a car often cruelly championed by reviewers for its ugliness, the Rodius.

Its niche did not make it best-placed to ride out the global recession.

Earlier this year Ssangyong’s Chinese backer, the Shanghai Automotive Industry Corp, gave up management control and it went into receivership.

Union militancy

The court-appointed managers insisted that for the company to survive they needed to lay off more than 2,500 staff, a third of the total workforce.

And that is when the real trouble began.

Many workers did choose temporary redundancy, but 600 of those earmarked for the sack took to the barricades.

I spoke to one of them by telephone just before the strike ended.

“It is bad management and their bad decisions that have caused the problems, but only the workers who are facing the consequences,” he said.

The management had attempted to reach a compromise, promising to guarantee 40% of the strikers’ jobs in return for their surrender, but the union stuck to its demand for all jobs to be saved.

In the end, the deal they are reported to have accepted does not look all that different to the one on offer earlier.

Does South Korea have more militant unions than other developed economies?

National bargain

Surveys have shown that, among foreign investors, the country does have a reputation for union militancy which sometimes puts them off.

The umbrella labour group involved in the Ssangyong dispute, the Korean Confederation of Trade Unions (KCTU), is often singled out for blame.

“Parts of the labour movement really do need to change,” Professor Park Young-bum, of Korea’s Hansung University says.

“Too often they try to solve problems by using their physical strength, but the government also needs to be more open, they need a better dialogue with the unions.”

Perhaps things are changing.

A “national bargain” of sorts was struck earlier this year as state-run firms and a number of large conglomerates agreed to sign up to a government-backed scheme to save jobs.

Managers took pay cuts and workers began job-sharing, or agreed to cuts in hours, in an effort to keep everyone on the payroll.

And a number of unions have severed their affiliation with the KCTU, saying it is too focused on political battles, including the union at the giant telecoms company, KT.

‘Simple truth’

But some observers point out that South Korea’s trade union movement needs to be so strong because the welfare system is so weak compared with other wealthy economies.

Jobs, the argument goes, are worth fighting for.

But few people believe the scenes at Ssangyong over the past few weeks have been in anyone’s interest, least of all the thousands of workers who were not facing the sack and wanted to get the production lines running again.

The dispute, the company says, has cost it more than $250m (£150m), and its future was already far from assured.

“There will be no jobs or unions unless there are companies,” the Federation of Korean Industries said in a statement this week.

“Labour unions need to understand this simple truth.”  –BBC News, Seoul