Seoul Promises Raises, Ends Strike : Government Intervention Stops Walkout Against Hyundai

The government intervened for the first time today in strikes that have crippled vital export industries, ending a walkout at the giant Hyundai company by promising workers raises and other benefits.

Han In Hee, vice minister of labor, told 20,000 striking Hyundai workers at a stadium outside the southern industrial city of Ulsan that the government will do its best to obtain the benefits by Sept. 1. Such a promise from South Korea’s authoritarian government is a virtual guarantee.

Although Han said worker demands would be met, he did not specify whether that included labor unions free from government control or interference, a main objective of the strikers.

First Intervention

It was the first government intervention in weeks of labor turmoil that has hamstrung some of South Korea’s largest industrial concerns and forced scores of smaller plants to close. Hyundai is South Korea’s largest auto manufacturer and a major factor in the U.S. subcompact market.

Strikes and other actions began after President Chun Doo Hwan agreed June 30, after a month of anti-government protest, to accept opposition demands for direct presidential elections, freer trade unions and other democratic reforms.

Low wages, which keep the prices of export goods low, and a virtual ban on strikes have been important elements of the South Korean economic boom that began in the 1970s.

Both Sides Warned

Officials previously urged labor and management to settle their disputes by negotiation, warning of government intervention if labor trouble continued.

In his pledge to workers at Ulsan, Han said he would try to persuade management to recognize a new labor alliance that embraces half the 12 Hyundai companies in Ulsan. He promised to arrange a meeting in Seoul on Wednesday between management and alliance leaders.

After hearing the ministry official at the stadium, the workers dispersed at shortly after 9 p.m., ending 12 hours of protest on the second day of unrest by Hyundai employees in Ulsan.

“We consider Vice Minister Han’s proposal an important breakthrough,” one strike leader said on the state television network KBS. He said the workers would return to their jobs Thursday.

At a rally earlier today, strikers burned in effigy Chung Ju Young, head of South Korea’s largest company. Many shouted “Go to hell!” as the Hyundai chief’s likeness went up in flames.

About 40,000 workers then marched nine miles along a highway behind trucks, bulldozers, cranes and trailers, shouting “Democratic unions!” and “Down with Chung Ju Young!”

Half of them filled the stadium outside Ulsan after the march for a four-hour rally, during which Han made his proposals.

Strikes were reported in progress at 424 workplaces as of today, including 83 new ones.

The Hotel Lotte in downtown Seoul, the country’s largest tourist hotel with 1,017 rooms, was paralyzed because 600 service workers stayed off the job for the second day. It turned away 350 prospective guests.