Help needed

Yi Jung-jae

I became acquainted with Lee Shi-kuk through a friend of mine. Lee is the head of European operations at a company in the wholesale clothing business. He has been forced to go on leave since April 1 due to the coronavirus (Covid-19) pandemic. The company had to streamline and lay off employees after orders from overseas markets stopped coming in. Lee spoke about the hard time under a pseudonym so as to avoid any damage to his company.

Earlier this month, an online petition was posted on the Blue House website beseeching the president to help the apparel and textile industry, which has been battered by the Covid-19 outbreak. Lee asked others to sign the petition. The petition has so far drawn over 10,000 signatures.

Lee, who is now 40, joined the company at the age of 30. It took him longer to get a college degree because he had to earn his tuition. He became the head of the European division after 10 years. His team was responsible for orders of about $6 million a month. But from late February and early March, orders stopped coming. Shipments already under production were canceled. A German buyer claimed it couldn’t pay any compensation since the cancellation was due to the coronavirus outbreak. Ten workers on Lee’s team were ordered to work from home.

The situation worsened every day. The mainstay U.S. team also grappled with cancellations of orders. The U.S. market accounted for $9 million in sales a month.Cancellations reached 14 billion won ($11.5 million) in February and March alone.

The company specializes in women’s wear, and the peak season is from December to March. That period generates 60 percent of yearly revenue.

Small merchants and mom-and-pop store owners are rushing to the Small Enterprise and Market Service to ask questions about how to get loans to stay afloat during the Covid-19 crisis. [NEWS1]

Orders are zero until June. Even if orders start coming in from July, shipments at best can start in September or October. Payment is usually made three to four months after shipments. At this rate, the company cannot expect to have any earnings this year. It has nowhere to seek compensation. U.S. and German laws waive penalties for breaking contracts due to natural disasters.

Some Korean companies are readying lawsuits, but they can hardly expect to win.

Lee and ten others on his team had to agree to three-month furloughs, choosing to settle for halved monthly paychecks instead of layoffs. There are 70 others in the company whose futures are on the line. The company promised they will be called back if orders are renewed from Germany, which is the big hope so far.

The government subsidy for employment has not been a practical comfort. Under the relief program, if a company pays 70 percent of the monthly salary during a furlough, the government subsidizes 90 percent.

The procedure, however, is complicated. It requires the help of a certified labor attorney who would collect about 10 percent of the amount. Therefore, both the company and employees prefer half salaries. The company promised to return the rest once it gets state compensation.

For Lee, the online petition pleading for help felt like his own. Due to the company’s woes, suppliers are also facing liquidity crises. Long-time partners are barely surviving.

The relief grant is appreciated. But what Lee wishes for most is the survival of his company. He said he would not mind being out of work for several months if the company can be saved.

Lee is looking for a job every day. He is willing to take any offer. He has not been laid off yet and could return to work. “I cannot live on wishful thinking,” he said.

JoongAng Ilbo, April 17, Page 30