In S. Korea, Labor Finding Managers More Cooperative

Kim Woo Choong, founder and chairman of the Daewoo Group, says he has met each of the thousands of workers at the debt-burdened shipyard that his multibillion-dollar conglomerate operates here.

These days, he is accepting invitations to breakfast with workers’ families and is visiting their apartments, one at a time, he adds.

“What are your complaints?” he has asked them all. And he says he has investigated and corrected, or at least addressed, each concern.

The extraordinary attention that Kim is paying to the 10,000 workers at Daewoo Shipbuilding and Heavy Industry’s shipyard is unprecedented in South Korea, a nation with a history of authoritarian governments and suppression of labor.

Last year, so massive was the shipyard’s accumulated debt--more than $1 billion--and so serious the labor strife that Kim, 53, felt compelled to move here from Seoul to assume leadership of the shipyard himself. He also had to threaten to let the company go bankrupt to win 11th-hour concessions from the union as a condition for help from the government.

But now, his approach symbolizes the new labor-management era that has developed since 1987, when President Roh Tae Woo promised in his election campaign to democratize the country. Wages have soared more than 20% each year for the past three years, impairing South Korea’s international competitiveness and turning an export boom into a decline.

Signs of moderation like those at the Daewoo shipyard are spreading nationwide, although concern about potential trouble remains. Through late May, the Labor Ministry reported, the number of labor disputes was down more than 80% compared to last year. Average wage increases of 8.5% had been approved, compared to an average of 17.3% during the same period last year, the ministry said.

Even Kim Young Bae, acting president of the militant Democratic Labor Union Federation, which Roh’s government has refused to recognize, said the federation’s 600 unions are seeking wage increases of only 20% to 25%, compared to last year’s average demand of 33%.

“Only in the last two years have wage increases exceeded productivity gains. Never before did they equal increases in productivity,” the labor leader complained, noting that only 23% of the labor force is unionized. In addition, he said, “prices have gone up so much that wage increases still haven’t improved our livelihood.”

Nonetheless, he and Daewoo’s Kim Woo Choong predicted that pay raises will probably be held to about 10% this year.

A get-tough policy adopted by Roh and the belief that steep wage increases are creating a crisis is persuading workers to moderate their demands, the labor federation’s Kim acknowledged.

Lee Won Duck, special adviser to the labor minister, agreed. “A consensus between labor and management is developing that the Korean economy is facing difficult times,” he said.

Fundamental problems remain, however, and “labor has awakened,” Kim Young Bae said, adding that more unions have been formed since 1987 than in the previous decade.

Even more unionization is likely, according to Prof. Park Young Ki of Sogang University’s Institute for Labor and Management. For that reason, he said, it is important that the country come up with “a labor law that can be accepted by both labor and management. We still haven’t established rules of the game.”

Under current labor law, all disputes, in effect, are treated as illegal, Park said. Moreover, he charged, government and management still refuse to accept unions as a partner instead of an enemy. Many union leaders, including the president of Kim’s federation, have been arrested.

One former high government official, who asked not to be named, was especially critical of Roh’s new strategy of citing a need to uphold the law as a reason to send in police to break up strikes.

“The issue is not whether authorities are following legal procedures or not. The issue is whether authorities are operating with insight, prudence and wisdom,” the official said. “They aren’t.”

Park warned that hostility toward unions may give employees a negative attitude toward work, diminishing productivity. Americans here also fault South Korean businessmen for relying too heavily on cheap labor and failing to bolster productivity by installing labor-saving devices before democratization began.

Nonetheless, change already borders on the revolutionary. Until 1987, workweeks of 66 hours were the norm at all Daewoo plants, with overtime paid beyond 48 hours. Now “workers won’t accept more than two hours overtime (a day),” Kim Woo Choong said in an interview on this island off the south coast of South Korea.

“For planning purposes, we count on 2,200 hours (of work per employee) a year--almost the same as Japan,” he said, adding: “This year, things are very calm.” Americans work about 1,800 hours a year.

One U.S. businessman, who asked not to be named, said he tells potential newcomers, “If you are thinking of coming here for cheap labor to set up a manufacturing plant for exports--don’t. Go to Alabama, Mexico or anywhere else. But if you have a product that will sell in the Korean market, then it’s OK.”

The businessman added: “The average Korean is a good worker when he is not striking.”

Management has started lobbying to persuade the government to withdraw some of the new privileges that have been given to labor. A 44-hour basic workweek, due to go into effect this fall, and conditions of overtime pay are two of the major targets.

Labor issues have grown so controversial, however, that the Labor Ministry says it plans no attempt to revise any law for the rest of the year.