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Kumho Tire to Shed 706 Workers Next Month

Posted August. 19, 2009 08:45,   


Kumho Tire will lay off 18 percent of its workforce next month and has filed an application to that end with the Gwangju Regional Labor Office.

The company’s management and labor are in a severe dispute over wages.

The Labor Ministry said yesterday that Kumho will dismiss 706 employees Sept. 16. The company cited aggravating business conditions, rising accumulated deficits, and a lower operating rate at its factories due to declining profits.

When a company reduces staff due to management problems, it must report the layoff to the ministry within 30 days.

After sending work performance records based on layoff standards to all employees, Kumho began offering early retirement Aug. 10. Just 20 workers have applied for it, however.

With no progress made in wage negotiations that started in May, the Kumho union has launched strikes and other activities since July 1.

The union wants a basic pay raise of 87,709 won (70 U.S. dollars), negotiations for bonuses for both last year and this year, and a company pledge to invest in facilities and raise the competitiveness of domestic factories.

Kumho, however, said it will freeze wages, not pay bonuses for last year, and suspend the provision of welfare benefits. It said layoffs are inevitable if the union continues to snub a compromise.

The union said in a statement, “(Layoffs) are an act of shifting the company’s responsibility for management failure to workers,” adding its emergency committee will discuss other courses of action, including a full-scale strike if necessary.

Kumho responded by saying, “We didn’t initially intend to lay off workers, but our patience wore out due to the union’s continuous refusal to reach an agreement.”

The company will suffer further disruption of operations as the union will hold elections for its leaders early next month, experts said. The situation could worsen if the Korea Metal Workers’ Union and the Korean Confederation of Trade Union intervene in the dispute.