Peak wage system for all at DoosanDoosan Group said Thursday it will implement the peak wage system in all of its affiliates starting next year.
Many of the nation’s major conglomerates including Samsung, Hyundai Motor Group and LG have also been trying to adopt the system in all units since last year, but Doosan is the first to complete the necessary measures, including negotiations with all its labor unions.
The peak wage system gradually cuts the wages of employees in the years leading up to their retirement. The system is being strongly pushed by the government, which says the savings in labor costs will allow companies to hire more young workers.
Beginning last year, most of Doosan Group’s units - including Doosan Heavy Industries, Doosan Infracore, Doosan Engine and Doosan DST - started to implement the system. The group said the rest of its affiliates will adopt it from next year.
“We will implement the peak wage system starting January 1 in all of our businesses,” said a Doosan spokesperson. “We have finalized all negotiations needed to adopt the system with our employees.”
The system will extend all Doosan workers’ retirement age to 60 and will adjust the amount of salary workers receive. Salaries will be cut by 20 percent when a worker turns 58, with an additional 10 percent taken off when he or she turns 59. That salary level will be held until retirement.
Doosan Infracore, which adopted the system last year, said it was able to hire 358 new employees, double its hiring from 2013, thanks to the labor cost savings.
Industry insiders say Doosan’s success could help other conglomerates because it proved negotiations are possible in sectors with traditionally aggressive unions, like heavy industries.
Hyundai Motor Group, which runs 41 businesses including the nation’s auto giants Hyundai Motor and Kia Motors as well as auto parts maker Hyundai Mobis and steelmaker Hyundai Steel, declared last week the intention to apply the system to all its companies. However, it still needs to negotiate with its unions, which are demanding the company extend the retirement age to 65.
After SK Group Chairman Chey Tae-won was released from prison last week, SK Group also declared it would adopt the system in all its affiliates, but it also needs to negotiate with its unions.
According to the Ministry of Employment and Labor, 151 of the 275 companies run by the nation’s top 15 conglomerates have adopted the system as of last week.
BY KWON SANG-SOO [firstname.lastname@example.org]
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