Bowa labor union to vote on strike this week

The labor union for Bowa Commercial Bank (寶華銀行) said it would vote on a strike resolution on Saturday if a new contract agreement is not reached with its custodian, the Central Deposit Insurance Corp (CDIC, 中央存保).

Previous negotiations failed to address job security and other concerns in the wake of a possible auction of the bank next month, the union said in a statement released yesterday.

Jerry Hsieh (謝冠章), head of the union, said its members had proposed to CDIC that successful bidders should retain at least 60 percent of the bank's employees, with a two-year job guarantee following the takeover.

However, CDIC only agreed to suggest that bidders retain a maximum of 50 percent of Bowa employees, with a one-year job guarantee, Hsieh said in a telephone interview yesterday.

In a statement issued yesterday, the union said its demand for a minimum 60 percent employee retention ratio was reasonable, citing the nearly 70 percent retention ratios at the Enterprise Bank of Hualien (花蓮企銀) and Taitung Business Bank (台東企銀), as well as an almost 100 percent ratio at China United Trust and Investment (中聯信託) after these troubled lenders were acquired by stronger rivals earlier this year.

In June, Chinatrust Commercial Bank (中國信託銀行) absorbed the Enterprise Bank of Hualien and ABN Amro Holding NV acquired Taitung Business Bank. In October, Cathay Financial Holding Corp (國泰金控) won a government auction to take control of China United Trust and Investment.

Hsieh said the union would like to continue addressing its concerns to CDIC.

"Our door is always open to the CDIC," he said. "But we need to secure our right to strike to safeguard our jobs in the long run."

Bowa has a total of 1,100 employees at its 39 branches nationwide. The bank has been in state-run CDIC's custody since August after it failed to raise fresh capital to strengthen its financial structure.

Based on Taiwan Ratings Corp's (中華信評) statistics, Bowa had seen its net worth deteriorate from NT$419 million (US$12.9 million) at the end of March to negative NT$2.254 billion at the end of June, while its deposit balance shrunk 22 percent in the first six months of the year from a year earlier.

CDIC -- which is scheduled to auction off the bank's assets and liabilities on Jan. 31 -- downplayed the union's strike threat yesterday, describing it as a "strategic move" the union is making to increase its bargaining power.

"They [the union] of course have to say that ... It is a gesture they must take to increase their odds for a better deal," CDIC president Johnson Chen (陳戰勝) said by telephone yesterday.

Chen didn't think the strike threat would jeopardize the bank's auction next month.

"It will be held on schedule," he said, adding that CDIC vice president Wang Nan-hua (王南華) would be in charge of the negotiation prior to the auction.

Chen said that any final decision regarding job security would depend on the winning bidder as CDIC could only exercise "moral suasion" to minimize any negative impact on employees.