One Strike Ends; Others Loom

Workers for Capro, a petrochemical company labor union, went back to work after 74 days of strikes on October 15.

The unionized workers which went on a strike demanding 12.8% salary raise starting August 3 went back to work that day and said they will continue to negotiate with the management.

The management, which locked out workers in response to the strike, is expected to report to the Busan Regional Labor Relations Commission that it withdrew the lockout and normalize production.

Capro’s decision reduces troubles that the petrochemical industry has gone through, but concerns still remain because other petrochemical companies that produce important raw materials different from what Capro produces went on strike or are expected to go on strike.

Capro is the only company in Korea that manufactures Caprolactam, the major material for nylon. Capro claims that the strike cost the company 72 billion won in sales revenue due to production disruption.

Supply disruption caused by the strike also took a toll on other oil companies.

Kolon Industries, Hyosung, KP Chemical and other nylon manufacturers had to reduce production because they didn’t get enough raw materials.

Capro went back to work and it is expected to help the petrochemical industry. However, the labor union and the management of the company had not struck a collective bargaining on wages and their differences had not narrowed down yet, which could lead to another strike.

Potential Supply Disruption-

Some other companies in the petrochemical and fine chemical industries manufacturing raw materials went on strikes causing concerns over possible supply disruption.

The nation’s largest Naphtha Cracking Center (NCC) company, Yeocheon NCC, went on a strike on October 11 after the rupture of wage negotiations. Yeocheon NCC, which was established as joint venture between Hanhwa Chemical Corporation and Daelim in 1999, produces ethylene, propylene, benzene, and other raw materials needed for the petrochemical industry.

KOC, a petrochemical company that produces foaming agent and hydrazine, has been on a strike since August. The company announced the strike has already cost them more than 5 billion won in loss. Labor union leadership of Bokwang, paint manufacturer, went on a partial strike for the past month demanding 5 day work week.

Unreasonable demand vs. Profit Sharing-

Possibilities of more strikes are getting higher. The labor union and the management of Korea Petrochemical Industries, another NCC maker filed for arbitration to the Busan Regional Labor Relations Commission on September 25 hinting that a strike is impending. Workers of MDK, dye manufacturer, plan to stage a strike starting October 27 if the management does not drop layoff plan.

Under the circumstances that companies experience financial difficulties, the petrochemical industry keeps a principle that irrational demand for wage increase is not acceptable. Some petrochemical manufacturers, including Samsung Petrochemical, reduced production affected by rising oil prices. But the labor union says, “The management did not share profits for the past 4-5 years when the company enjoyed boom years.”

Yoo Yeong-gu from Korean Confederation of Trade Unions said, “Companies which enjoyed huge net profits didn’t provide their workers with appropriate bonus. Workers do not trust the management any longer. That is why workers stage a strike.”

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