[Focus] KEPCO's labor strike has great impact

The labor strikes organized by trade unions, led by the public sector, are on the rise. Oh Kyung-Ho, president of the Korea Electric Power Corp. (KEPCO) trade union, said it is certain that restructuring plan of the electricity industry will result in raising power fees and causing short supply of power and added that the union would block privatization of KEPCO by all means, as it is the leading the labor strife of the public sector.

However, the government intends to get approval of the National Assembly for privatization of KEPCO as scheduled for this year. So it seems that a frontal clash between the government and the union is unavoidable.

In particular, KEPCO is the key in restructuring of state-run companies, and it is expected to have a great influence on restructuring of the public sector. Already, both Federation of Korean Trade Unions (FKTU) and Korean Confederation of Trade Unions (KCTU) proclaimed that they would initiate a massive confrontation with KEPCO's strike as a starting point.

Labor unions are planning massive rallies in downtown areas along with industry-wide strikes, while the government is expected to crack down on such illegal strife on grounds that restructuring is inevitable for recovery of the nation's economy.

In its statement issued Thursday, the KCTU said that it has designated next week as a week for intensive strife to block restructuring and revision of labor law that is unfavorable to unions. Prior to December's general strike, the KCTU said that it would organize a massive rally and strike with participation of public sector, metal, financial and college unions.

On Nov. 26, the two leading labor unions, led by unions of KEPCO, Korea National Railway and Korea Telecom, will hold a massive rally of workers in the public sector at Seoul Station Plaza with nearly 30,000 union members participating. They are planning to march to Myongdong.

Critics say that the government is responsible for poor preparation for reform, adding that it caused KEPCO's labor strife. The privatization of KEPCO was announced in 1994. During the past six years, however, the government failed to persuade those who are opposing the plan.

Also, it failed to provide a vision after the scheduled privatization. Eventually, the government has to face a strong challenge from the union at a time when it is seeking an approval of the National Assembly.

It is indicated that the government has been running about in confusion in the process of privatizing state-run corporations. The political circle also was pressed with its wait-and-see attitude. The restructuring law of KEPCO was submitted to the National Assembly at the end of last year, but parliamentarians haven't introduced it on the agenda at all, as they are worried about facing a campaign by unions to defeat them in the elections.

The incident of KEPCO showed how reform of state-run corporations is difficult to carry out. But it is unavoidable. A recent inspection by the Board of Audit and Inspection reconfirmed the need for surgery of public firms. It showed that the management of state-run companies hasn't improved despite a series of reform measures.

In the case of Korea Telecom, the company laid off 12,000 employees during the past two years, but its labor cost increased by as much as 22%. Restructuring has to go on to correct such poor management practices. However, reform works have been delayed for various reasons.

Korea Tobacco & Ginseng is a good example. The company, which employs a total of 5,241 workers, is planning to lay off 741 workers by the end of this year. During the first half, however, only 29 applied for honorary retirement program. And there were none during the second half. What is more, the union is protesting the layoff plan.

According to the Ministry of Planning and Budget, the government is planning to lay off 41,000 workers in the public sector by the end of 2001. But the reality is that most state-run companies tend to rehire retired workers for a skilled job or reemploy them after firing them.

mjlee@donga.com