Stop the game of chicken

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Stop the game of chicken

GM Korea is teetering on the brink of bankruptcy. After the National Labor Relations Commission on Tuesday gave up the right to mediate between management and labor, its union obtained a legitimate right to strike. The possibility of the militant union launching an immediate walkout is relatively low as the two opposing sides are to have a final round of negotiations by Friday — the date fixed by the headquarters of General Motors (GM) in Detroit. But the public is increasingly distressed at the ugly war of nerves between labor and management of the local car manufacturer.

The two sides have already had eight rounds of negotiations, but could not narrow their differences. While management insists on first striking a provisional deal on a turnaround plan aimed at saving costs, the union insists on an across-the-board resolution of the dispute, including finding ways to deal with employees of the factory in Gunsan if it shuts down. Amid mounting tension, GM is putting pressure on the union by threatening to follow legal procedures needed to file for court receivership.

GM took a hard-line position in its negotiations with the South Korean government by threatening to reconsider its earlier plan to convert the money it lent to GM Korea into capital for its embattled subsidiary. It is possible that GM came up with that card to have the upper hand in negotiations. But we wonder if that really constitutes a responsible attitude as a major shareholder.

The union also should be held accountable for the crisis as union members are not free from criticism that they were only bent on safeguarding their hefty paychecks after shunning efforts to raise low productivity and save costs.

Labor and management must reach a compromise to keep their company afloat. In the face of a lack of forward-looking approaches by GM as a major shareholder, the union must make a wise decision. If the company goes under court receivership, workers will experience even more pain. If GM stops allocating production of new models to the local branch — and if the Korea Development Bank, GM Korea’s main creditor, stops its financial aid — GM Korea will most likely go into liquidation. That would lead to a loss of 300,000 jobs, including those of contractors.

The brinkmanship between management and labor is aimed at drawing government assistance. The government must not be swayed by such pressure. Instead, it must solve the conflict based on the principle of sharing pain as it did in the cases of Kumho Tire and STX Offshore and Shipbuilding.

JoongAng Ilbo, April 18, Page 30
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