[EDITORIALS]Kudos to all at GM Daewoo

GM Daewoo Auto and Technology Co. said that by next month it will have reinstated all 655 employees that were let go during the company’s restructuring in early 2000.
The automaker said it expected that every one of them, except for those who chose not to rejoin the company, will be rehired by GM Daewoo. If so, most of the 1,751 workers that were fired some six years ago will be back with their company.
This is great news. For those who have had to endure the hardship of losing their jobs, the announcement should be especially sweet. And yet the impact of GM Daewoo’s rehiring of those employees does not end with those workers, but will influence Korea’s broader labor-management relations as well.
The rehiring process is something that the company’s president, Nick Reilly, promised, but only on the condition that production at the Incheon plant was back to normal. With the brisk sales of new lines of cars produced there, the Incheon factory saw its production rate rise, and Mr. Reilly kept his word. The labor union trusted that management would keep its promise, and management indeed did so.
A layoff system, in essence, means that a company may have to fire employees during its difficult times, but will bring them back once the situation improves. It is akin to throwing heavy luggage off a sinking ship to try to save the vessel and its crew members. From the employees’ perspective, it would be easier to accept that some sacrifices have to be made to save their company rather than to have the company collapse and have all employees lose their jobs.
The layoffs and their acceptance were difficult decisions for both the management and the labor union to make, but in the long term, the layoffs benefitted both parties. This is why flexibility in the labor market is necessary, and GM Daewoo provides a perfect case study.
On the brink of bankruptcy, the company restructured to better deal with the situation, and once it recovered, it became strong enough to bring those workers back.
Another lesson to be learned from GM Daewoo’s rehiring is that our companies are where jobs are created. Only vigorous management of corporations brings more capital investment and more jobs.
In the end, the best way to create more jobs is to build a business environment conducive to more business activities by our companies. We applaud both GM Daewoo management and its labor union.