[EDITORIALS]Weak-kneed negotiatorsBoth the negotiations and the results of those negotiations between the government and railway workers to head off a strike have worried us. Although the strike is off, the government caved to union pressure.
First, Seoul backed away from a railway privatization plan which has been in the works for some years without a reasonable explanation. Its credibility has suffered a blow. The privatization of public industries is a long-standing government policy and eight businesses, including KT, have been sold off. The new government has postponed the privatization of the power generation and gas industries ― quietly. Now it has backed away from putting rail operations in private hands.
The national railroad runs a 600-700 billion won ($498-581 million) annual deficit. Unreformed, the rail service will leave taxpayers with a 50-trillion-won accumulated deficit by the year 2020. The government is neglecting its duty by leaving that kind of inefficiency unchallenged.
The minister of construction and transportation says that the reform of the railroad sector will still go on even though the privatization plan was canceled. But having backed down once, Seoul will find such reforms even harder to impose in the future.
The most serious problem is the precedent that the government retreats when it is pressed. This will have a bad effect on private sector labor negotiations as well. Under current law, threatening to strike over plans to privatize a firm is illegal, and the government called the threatened rail strike illegal. But it accepted the illegal demands during the negotiations. It has violated the law itself.
Some private sector unions are interfering with attempts to induce foreign investment. During the strike at Doosan Heavy Industries, the minister of labor sided with the union, and now the government itself has broken the law. As labor's traditional “spring struggle” begins, management’s position is weak.
A lack of consistency in government policy and frequent labor problems are the major reasons that foreign investors avoid Korea. The government has poured more fuel on those fires.