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Foreign-invested Firms Seeing Labor Strikes Skyrocket in Korea

Foreign-invested Firms Seeing Labor Strikes Skyrocket in Korea

Posted August. 31, 2003 23:22,   

한국어

“Labor strikes in Korea have gone too far. I`m regrettable to say that we finally decided to withdraw from our additional 10 million dollar investment plan in the country this year so as to boost exports to Japan”, said Ossian Clingspor, President of Tetra Pak Korea.

The number of labor disputes at foreign-invested firms in Koreas has been skyrocketing this year. Some of them were closed temporarily or permanently due to labor strikes. Consequently, competitiveness of companies operating in Korea has been lost, which has driven off firms to overseas. In this situation, an increasing number of foreign-invested firms are reconsidering their investment plans in Korea or withdrawal from the nation.

The Korea Trade-Investment Promotion Agency or KOTRA announced yesterday that the labor strikes, waged this year until August 28 in Korea, numbered 27, compared with 26 cases during last year.

Among them, seven following companies have suspended their operations in Korea: Lego Korea (closed from February 14 through May 31), Carrefour Korea (from June 27 through July 19), Owens Corning Korea (from July 19 through August 12), KGI Securities (from July 25 through August 26), Tetra Pack Korea (from July 28 through August 26), KOC (from August 11 through August 12), and Nestle Korea (since August 25 till now).

By business categories, the manufacturing industry showed the highest number of closure at 23. Most of them are auto-part manufacturers with 14 shutdowns. By countries, Japan witnessed 10 while France saw 7 cases of company shutdown.

Korea has offered the cheapest production cost out of our entire factories worldwide until two to three years ago, but now the nation‘s competitiveness in production cost fell to third place following Brazil and India”, said MR. James Blaszczyk, President of Owens Corning Korea and pointed out, “In considering our 30 million dollar-scale investment plan this year in replacing facilities, increase in wages in Korea due to labor strikes has been a negative factor.”

“During my work in Korea for the past three years and a half, the strikes have lasted over two years,” said Ross H., Managing Director at Korea Nestle and head of the company`s factory, adding, “Union leaders should be hold responsible for the illegal activities in civil and criminal courts while the principle of “no labor, no salary” should be kept so that a recurrence of such illegal walkouts can be prevented.”

Lee Pyong-bok, head of ombudsman office for foreign businesses at KOTRA, pointed out, “Although the participatory government is striving to develop the nation to become the Northeast Asian economic hub, everlasting labor strikes at foreign firms have led to reduction in foreign investment as well as industrial hollowing-out, devastating the potential for Korea‘s future economic growth.”



Chan-Sun Hong hcs@donga.com