Strikes Cause Three Trillion Won in Production Losses

Production and export losses caused by strikes last year totaled over three trillion won and well above two billion dollars, respectively, based on estimates conducted by companies which suffered shutdowns because of strikes.

The production losses indicate revenue loss amounts directly caused by labor-management disputes, and the export setback amount equals the amount exports account for out of the production loss amount.

In particular, the production loss amount of Hyundai Motors and Kia Motors, which experienced serious internal strife over whether to go on strike, was close to 80 percent of the total amount.

The Korea Institute for Industrial Economics & Trade (KIET) announced yesterday, based on a survey of 43 places of business where production and export setbacks took place out of 138 (65 in the manufacturing industry and 73 in other industries), companies which experienced labor-management disputes last year, that Korea’s total strike production losses amounted to 3.324 trillion won (2.064 billion dollars).

This shows that the production and export setback amount increased by 135.1 percent and 149.0 percent in each, compared to 2005.

In particular, it was found out that the production and export losses caused by strikes of Hyundai and Kia Motors was 79.3 percent and 87.5 percent of the total amount, respectively, which means most of the production and export losses caused by strikes were within these two companies.

In addition, as the amount of production and export losses in nine large-sized places of business were 98.5 percent and 98.8 percent of the total, it was analyzed that labor-management relationship stabilization is critical to large-sized companies.

The number of labor-management disputes was 138 last year, down by 51.9 percent compared to 2005 (287 cases), but the number of illegal disputes was 24, up by 41.2 percent compared to 2005. The number of labor loss days was 1200.6, up by 41.6 percent from 847.7 in 2005.

ddr@donga.com