[Editorial] Bank unionists must return to work

With the strike by workers of Kookmin Bank and Housing & Commercial Bank (H&CB) entering its fifth day, customers and corporations have suffered great inconvenience at a time when demand for bank services is traditionally at its peak. The two banks failed in their attempts to open their doors Tuesday, the day after the Christmas holiday.

Since the presidents of Kookmin and H&CB made the surprising announcement of their merger plan, unionists at the two banks have been on a joint strike, "sympathy" walkouts have begun and the nation's banking sector has been thrown into a state of chaos. Although the government said it had a contingency plan in the face of strikes, the plan came to nothing when the projected proxy payments for the two striking banks by Hanvit and Korea Exchange Bank were foiled because of computer system failures.

The merger between the banks is considered a key to the ongoing financial sector restructuring and the final decision on the marriage is to be made at a general meeting of shareholders. The major shareholders of Kookmin Bank are the government and Goldman Sachs, and the big shareholders of H&CB are the government and ING. The majority shareholders are the foreign financial institutions. Hence, the government and the trade unions are not in a position to decide on the future of the two banks.

The progress of the ongoing merger plan is being closely watched not only here but also by foreign banks over the world. The U. S. economy is now feared to make a hard landing and financial markets in Southeast Asian nations are unstable. At this juncture, if the planned merger of the two banks is aborted due to resistance from the trade unions, the Korean economy could plunge into another crisis.

Kookmin Bank is classified as a viable institution, yet due to excessive competition among overlapping branch offices, its profitability has been on a gradual decline. Therefore, if the two banks are merged, the closure of redundant branches will be unavoidable. For this reason, workers at the two banks fear massive layoffs.

Nevertheless, the integration of the two banks has reached the point of no return. As the presidents of the two banks made a public pledge to forgo forced layoffs of unionists and to make generous severance payments, the best course for the strikers is to return to work and resume negotiations with management.

The Korea Financial Industry Union (KFIU) announced a plan to stage a general strike against the banking merger on Dec. 28. Surely, the disposition of the two banks will be the litmus test for the nation's financial restructuring efforts. The government is urged to do its best to address the people's financial woes, while maintaining the principles of the banking sector reform effort, for which it injected some 150 trillion won in public funds.