Sun Is Blazing Down On Rusty Machines

Synthetic Fiber Industrial Complex in Namgu, Woolsan, is the `mecca` of the production of the Korean synthetic fiber. In the midst of hot summer, the Industrial Complex looks deserted. It is hard to find the liveliness of factories. Especially, there are no sound of machines and smoke from chimneys in major factories like Taekwang Industry, Daehan Synthetic Fiber, and Kohap, of which labor unions have been on `solidarity strikes` for 53 days.

When the reporter visited the Industrial Complex on Friday afternoon, machines, covered with dust, were left aside in the factory of Taekwang Industry. Labor unionists were controlling the doorway of the main gate. Spandex, the spun thread used for making bathing suits and lingerie, were filed without having been shipped.

Major synthetic fiber factories in Woolsan have not operated due to the conflicts between the management and the labor union. As the labor union launched solidarity strikes, opposing the management that has pushed for the large-scale structural adjustment and the transfer of equipments to overseas, machines stopped running.

The financial loss is not small. The loss of Taekwang Industry, including an affiliated company Daehan Synthetic Fiber, is 4.7 billion won a day. The loss of Kohap is 900 million won, according to the company. A total amount of loss of Taekwang Industry, including Daehan Synthetic Fiber, is 237.7 billion won since the shutdown of machine.

Taekwang was the only company that made a profit during the foreign exchange crisis. However, the situation has changed as spandex business, which contributed to making a profit, began to make a deficit due to the excessive competition among companies.

Business profit of Taekwang has decreased from 192.5 billion won in 1999 to 10 billion won in 2000. Taekwang made a deficit of 18.8 billion won in the first quarter of this year. The management circle of Taekwang and Daehan Synthetic Fiber decided to stop the operation of the outworn equipments and to dismiss 507 employees. Oh Yong-Il, executive director of Daehan Synthetic Fiber said, ``Without structural adjustment, 140 billion won of deficit is anticipated this year.`` Meanwhile, Song Kyo-Sun, chairperson of the labor union refuted it saying that ``if a solid company like Taekwang, of which debt ratio is 32.8 percent, has to enforce the structural adjustment, what kind of company can survive in South Korea?``

Kohap, which is trying to improve the company structure, planned to transfer some of the factory equipments to Qingdao, China. However, the labor union launched strikes, opposing to the reshuffle of the idle human resources. Lee Sang-Kyoon, vice-chief of the management-aid team, said that ``it is difficult to survive even if the management and the labor union cooperate. However, with the continuing strikes, the creditors intend to liquidate the textile business.``

Hyosung, in which strikes were brought to an end by the government power, are operating now. However, as the management and the labor union are having hard time in negotiating, a combat police force unit is `protecting` the four entries of the factory. A company official said that `as the labor union is struggling to prohibit workers from going to work, the situation is still unstable.``

The domestic synthetic fiber companies are beset with troubles both at home and abroad, such as the worsening of payability due to the oversupply, reduction of domestic demands in major import countries, and the increased production of China and Taiwan. Competitiveness of productions like polyester and nylon is already relegated by China. The unit cost of export of polyester and nylon dropped by 50 percent in comparison with 1995.

Experts urged for the resolution between the management and the labor union as early as possible, saying that ``whatever the reason is, the fact that industrial factories where a great amount of funds have been invested are not operating is becoming a stumbling block for the recovery of the South Korean economy.``

artemes@donga.com