Thu, Jul 03, 2003 - Page 5 News List

Auto workers in S Korea go on strike

WAGE VERSUS ECONOMY The union said 90,000 of its 162,000 members were participating in the strike action, while about 5,000 workers were expected to stage a rally in the capital

REUTERS , SEOUL

South Korea faced a new wave of labor unrest yesterday, hot on the heels of a four-day rail strike, as workers downed tools at the country's top car maker and about 180 other firms.

"Almost all of our member unions have started the strike as planned, although unions at one or two companies cancelled their plans after their negotiations with the management were settled," Kim Ho-gyu, general secretary of the Korea Metal Worker's Federation, said by telephone.

Workers are striking for more pay and better working conditions.

He did not name those companies where negotiations were settled but denied talk in financial markets that the union at Hyundai Motor Co, the country's top auto maker, had decided not to join the industrial action.

A public relations official at Hyundai, which has a history of labor stoppages, said union members would stop work from 1:00pm for eight hours.

The union called for a four-hour strike, but some of its member branches -- including Hyundai and sports utility vehicle maker Ssangyong Motor Co -- plan walk-outs for eight hours.

The chief spokesman for the labor ministry said the government had no specific comment yesterday's industrial action.

The government of President Roh Moo-hyun gained some relief on Tuesday when railway workers voted to end a strike that crippled the network and prompted the administration to take a tougher line on labor unrest.

The union said 90,000 of its 162,000 members were participating in the strike action, while about 5,000 workers were expected to stage a rally in Seoul.

The labor unrest has emerged as an additional pressure for South Korea's economy, the fourth-largest in Asia, which already faces falling domestic spending and lingering investor concerns over a crisis involving North Korea's nuclear program.

Foreign investors see labor inflexibility as the main hurdle to doing business in an export-driven South Korean economy, which a senior finance ministry official said yesterday may have suffered a worse-than-expected slump in the second quarter.

The official also said economic growth would almost certainly fall below four percent this year and that the government might raise the size of a proposed 4.2 trillion won (US$3.5 billion) supplementary budget.

"The performance in the second quarter looked far worse than we thought, definitely worse than the first quarter. At the moment, expanding the budget spending seems to be the only way to prevent the economy from sinking further," said Bahk Byong-won, director-general at the ministry's economic policy division.

Roh's government had been criticized by investors and analysts for its soft line on key labor actions.

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