Labor, management reach prov. accord on manpower reduction

Daewoo Motor¡¯s labor and management reached a provisional agreement on the company¡¯s restructuring plan, which includes job cuts Monday.

The agreement opened the way for court receivership of the ailing company to begin and for creditors to deliver fresh loans. The negotiations with potential buyer General Motors (GM), which had been halted, are also expected to resume soon.

In another round of negotiations held that day, Kim Il-Sup, chairman of the labor union and other delegates accepted the final proposal on restructuring by the management on a provisional basis and the agreement was later approved at a meeting of the union¡¯s representatives.

Instead of accepting the restructuring condition, which may threaten their jobs, the union successfully forced the management to give up its plan to implement the reforms in December, leaving some room for the union to intervene in the process of arranging a self-rescue plan for Daewoo Motor later.

The company plans to submit documents acquiescing to the restructuring plan including the labor-management agreement to the Inchon District Court on Tuesday. The court is expected to start its protection of the company within this week at the earliest as it has said that the company would likely be kept alive if the labor union agrees to layoffs.

Creditors including Korea Development Bank (KDB) also decided to hold a consultative meeting of creditors and discuss supplying emergency loans. If the loans are granted, Daewoo Motor¡¯s plant in Pupyong will go back into operations though in part. The plant has been halted since Nov. 9. Once the plant begins operations, the procedure for normalizing the business will also speed up and the negotiations with GM to sell off the company will resume.

Meanwhile, on the same day, a committee of office workers of Daewoo Motor tendered their resignations en masse to the Inchon court and the KDB, along with a petition calling for a labor-management agreement and more loans from creditors.