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Being unreasonable

Published: 14 Jun. 2016, 18:13

The labor union of Daewoo Shipbuilding and Marine Engineering (DSME) has decided to strike in protest of the government-led restructuring of the embattled company. In a vote among over 7,000 union members on Tuesday, 85 percent gave a go-ahead to the strike to oppose a “one-sided streamlining” of the insolvent shipbuilder and to ensure their stable employment. The action translates into an outright rejection of creditors’ proposals for its survival. The creditor group had advised DSME to cut 30 percent of its personnel costs and production capacity by 2020 and split off its defense sector to save a total of 5.3 trillion won ($4.49 billion).

In legal terms, the union’s decision to strike is not illegitimate. We also understand the anxieties of workers who became exposed to the threat of joblessness after the management’s malicious cover-up of its massive losses. But a protest opposing schemes to help the struggling shipbuilder stay afloat cannot solve anything.

The DSME has received a mega-size public fund from the government and hefty loans from state-run banks in excess of 7 trillion won since 2000, when it became a subsidiary of Korea Development Bank, its major creditor. If the company is to survive, it needs another massive bailout package in trillion won. With its debt-to-capital ratio reaching as high as 7,300 percent, the shipbuilder has ceased to take orders from overseas. Can the union lift the bankrupt company by maintaining its manpower, salary and production facilities at the current level.

More embarrassing and frustrated are the public. With no direct connection with the shipbuilder, they have to pay additional tax to protect the company just because it falls into the category of our mainstay industries. In fact, many people still receive much less salaries and welfare benefits than they do. The union’s resolution to stage a strike is only seen as an effort to protect their interests. Moreover, they agreed not to strike when the company received a 4.2 trillion won bailout from the government last October, not to mention presenting a collective consent to faithfully carry out self-rescue plans. Who would then feel sympathy with the union’s flip-flop?

Tax money is not for free. A public consensus to rescue the sinking shipbuilder is not strong either. DSME must give up its reckless plan by squarely facing their current plight. The union of Hanjin Heavy Industries and Construction, another ailing local shipbuilder, announced yesterday it will entrust their wage negotiation for this year to the management to get over its financial crisis from the prolonged slump in the shipbuilding business. And yet it is not easy to survive. Citizens will not give a go-ahead to the government pouring their tax money into salvaging the company in moral hazard.

JoongAng Ilbo, Jun. 15, Page 30