S. Korean Strikes Entering Crucial Phase, Analysts Say

TOKYO —  With organized labor and the government in Seoul moving toward a showdown over a controversial new labor law, analysts say the next few days will be crucial in determining whether strikes threatening South Korea’s economy will spread or fade away.

Authorities and business leaders Monday signaled moves toward an aggressive strategy to suppress the actions, which come at a time when South Korea’s economic growth is slowing and exports are weakening. The strikes began Dec. 26 to protest the sudden passage of a law slashing job security. At their peak last month, about 350,000 workers walked off their jobs.

Prosecutors issued summonses for questioning--a preliminary to possible arrest--to 100 labor leaders across the country Monday and said they would probably seek to arrest at least 20 union officials.

A key question is whether public sentiment--which has leaned toward the unions--will still support labor. Many analysts predict that such support will be limited now, when economic gloom prevails and wages already are relatively high for the best-organized workers.

South Korean President Kim Young Sam was to address the strike issue in an annual New Year news conference this morning. His government threatened “stern countermeasures” against the strikes shortly after they began.

The job actions are directed by two umbrella union groups: the outlawed Korean Confederation of Trade Unions (KCTU), with 500,000 members; and the more moderate Federation of Korean Trade Unions (FKTU), with 1.2 million members. While the confederation is technically illegal, it has been allowed to function openly.

An estimated 100,000 to 150,000 workers struck Monday, Korean media reported. Remaining idled were several auto makers, including South Korea’s largest, Hyundai Motor Co., and the world’s largest shipyard, run by Hyundai Heavy Industries.

Cho Dong Sung, a Seoul National University economics professor, said he believes public sentiment opposes major strikes that could damage South Korea’s economy. This is because most South Koreans sympathize with employees of small- and medium-sized businesses, which are facing hard times, more than they do with workers at major firms that are the center of export production and union activity, he said.

“The shutdown of factories of major companies literally means shutting down the factories of thousands of parts suppliers,” Cho said. “Small-to-medium-sized companies are in a dire situation.”

Many smaller firms were already facing declines in sales and profits, even as big companies expand at annual rates of as much as 10%, he said. And while South Korea’s economy grew an estimated 6.8% in 1996, that is down from 9% in 1995; growth is expected to be less this year if labor strife continues.

Ironically, the law that provoked labor’s fury was expected to be a major step toward granting unions more rights in line with international standards. The government has linked passage of the law to its admission Jan. 1 as a member of the Organization for Economic Cooperation and Development, a 29-member grouping of the world’s most industrialized nations.

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As recently as a month ago, most discussion of the law focused on expectations that it would legalize the KCTU and allow creation of industry-wide trade unions, in contrast to the system of company unions more typical of South Korea and Japan--a system that tends to weaken labor’s bargaining power. The law took these steps but unexpectedly postponed them until 2000.

The law also has angered labor by making it easier for companies to lay off workers, something the government says is necessary for South Korea to compete in an increasingly globalized economy.

The new law “conforms to international trends” and thus there is no public consensus in support of unions, said Lee Han Koo, director of the Daewoo Economic Research Center. But he said events could get out of hand, if there were any “tragic” incidents during protests and government countermeasures.

The union groups said that unless Kim withdraws his support for the labor law, 210 local unions with 240,000 workers affiliated with the KCTU will launch a general strike starting Wednesday and unions associated with the other group will strike next week.

The summonses issued Monday targeted officials of the banned KCTU, ordering them to appear for questioning today--a demand union leaders said they would refuse. Those summoned may refuse twice; then prosecutors can seek warrants for their arrest. Those who respond face a risk of immediate arrest after questioning if investigators conclude they have broken the law.

Five leading employer groups and 15 top business conglomerates met Monday, then announced plans to sue union leaders for losses from the strikes. Byun Hae Ryong, a director of the Korea Employers’ Federation, told reporters that strikes had cost $400 million in lost production through Friday.

Chi Jung Nam of The Times’ Seoul Bureau contributed to this report.