Nestle Considers Closing Production Line in Korea

Nestle, a multinational food and drink maker, has instructed its Korean unit to review the legal procedure for closing the production line in Choeongju, North Chungcheong Province, in which workers have been on a strike for two months. Also, the company ordered the Korean unit to keep the rule of `no work, no pay.`

Meanwhile, Nestle Korea announced that it will expand its lockout, which has begun at its main office in Seoul, to all of its seven sales branches and four logistics centers, submitting a lockout report to the Cheongju City government.

The Switzerland-based food giant owns Nestle Korea 100 percent and operates a total of 500 subsidiaries in 85 countries worldwide.

According to Nestle Korea Wednesday, the parent firm in Switzerland made it clear in a document sent to Nestle Korea President Lee Sam-hwi that the company could not accept the labor union`s interference in the management and human resources rights. “As there is a rule of `no work, no pay` in the Korean Labor Law, Nestle Korea must follow local laws,” the Swiss firm argued. “Even after the walkout is finished, the Korean unit must not compensate wages, whether partial or entire, under any circumstances,” it stated. In addition, the company ordered its Korean unit to review the need to keep the production line in Korea and the closure of it if the competitiveness continues to fall.

“As Korean workers` wages increased by an annual 10 percent over the past three years, the parent firm is deeply concerned about the declining productivity of the Choengju line,” said President Lee. “They didn`t even talk about wages in Korea before, but they are different now,” he added. On the other hand, the chief of the labor union argued that every time workers went on a strike, the company said they would close the production line. “If the president is willing to talk, we can solve the problem,” he said.

Dong-Ki Sung esprit@donga.com