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GM’s Takeover of Daewoo Ignites Protests

Strikes part of larger labor troubles in South Korea

By Janet Ng

In Korea, what started off as a peaceful labor demonstration turned into violence and became another example of the far-reaching effects of globalization. On April 10, Daewoo employees in South Korea attempted to enter their union office. As officers advanced, workers sat down and took off their shirts to show that they intended to protest nonviolently. A wave of police rushed forward and brutally beat them with clubs and riot shields. Men lay crumpled on the floor, some convulsing from blows to the head, many bleeding from facial wounds.

The attack by the police army — so called because officers are drafted into the force — was captured on a video that Kwang-Jun Yu showed to a group of union activists on Monday evening at the International Action Center (IAC) in San Francisco. As director of policy of the Daewoo Motor Workers Union in South Korea, Yu is touring the United States to call for support from American union workers.

“We believe that no matter where you are, if you are a worker, you should not be persecuted for capital,” Yu said.

Yu started working for Daewoo in 1977, then was fired in 1985 for union activity, and reinstated in 1989.

Last May, General Motors Corp. offered to buy Daewoo Motor on the condition that Daewoo layoff some 5,000 employees.

“U.S. workers need to realize that U.S. corporations constantly seek a higher rate of profit abroad. If they can succeed in lower wages and conditions [overseas], they will be stronger in attacking the wages and conditions of American workers,” said Gloria La Riva, a coordinator at the IAC.

On Feb. 16, the bankrupt Daewoo Motor eliminated 1,750 jobs, and replaced permanent positions with temporary workers. Workers make on average $15-20 per day and can be terminated at any time. Yu was one of those laid off.

South Korea has no social security system that can cushion those who have lost a job.

“For Koreans, a layoff means a denial of the right to survival,” Yu said.

Since the layoffs at Daewoo, there have been nationwide mass strikes protesting the loss of jobs and working conditions at numerous other companies including airlines, hotels and hospitals.

The crisis in South Korea began during the 1997-98 Asian stock market crash. Asian and East Asian businesses and banks went into heavy debt. South Korea suffered a recession in 1998. The International Monetary Fund (IMF) responded by pledging $57 billion for South Korea, the largest loan for any country.

According to Yu, the IMF demanded profit-making guarantees. The Korean market had to be opened up completely; there had to be flexibility in the labor market and deregulation in every sector of the economy. Laws protecting the basic rights of workers were also weakened. The South Korean government also had to eliminate social security and cut back on health care. The money saved from government expenditures would then be given to pay the IMF debts.

Yu claimed that a number of South Korean companies, including Daewoo, were pressured to be receptive to a foreign takeover.

“The U.S. sees Asia as a tremendous source of cheap labor,” La Riva said. “The Daewoo takeover would give GM an entry into the Asian market.”

Yu cited an announcement given by the head of the U.S. Chamber of Commerce in South Korea that requested the takeover of Daewoo be free of charge.

He also quoted from a statement issued by the chairman of GM on Jan. 11, that said: “The South Korean government should not solve the [labor] problem politically.”

Ties between the South Korean government and GM appear to be very close. When President Kim Dae-Jung visited the United States in March, he also visited the GM headquarters.

Many union leaders in the U.S. have pointed out the irony of Kim’s position in the labor disputes. The first Nobel Peace laureate of the 21st century, Kim was exiled with a death sentence over his head before he came to power. The military regime that ruled Korea at the time considered him a dissident because of his protests for democracy.

“He rose to power on the backs of labor workers,” said Don Stillman, director of International Affairs at the United Auto Workers (UAW). Stillman met Kim during his exile and flew back to South Korea with him in the early 1980s.

Said Stillman: “His historical record is admirable, which makes the current repression even less tolerable. He’s someone who really should know better.”

Although there has been much talk about the labor disturbance, there is still a portion of workers who support foreign ownership. As recent as last Wednesday, some 7,000 Daewoo auto workers and almost all of the plant’s 3,800 unionized employees shut down Daewoo Motor Co.’s main plant in favor of a GM takeover.

“Today’s rally shows that despite some protests led by labor activists, a vast majority of Daewoo workers do support a GM takeover,” management spokesman Chung Hyung-keun said.

After 1992, Daewoo was GM’s rival in the small car industry in Europe and other sectors of the market with high growth in car sales. During GM’s ownership of Daewoo — from 1978 to 1992 — an average of six workers were killed and 443 injured each day in 1991 alone. Unionizing was illegal at the time, and when 2,000 Daewoo workers went on strike in 1985 to protest the lack of safety in the plant, GM called on some 8,000 police to quell the disturbance.

In Baltimore, Md., at the same time, employment at the GM plant dropped from 7,000 to 4,000. Injuries increased and in 1991, there was a 26-day strike. GM agreed to hire more workers, but still threatened to transfer jobs overseas.

Besides the loss of American jobs, Danny Park, director of Korean Immigrants Workers Advocates (KIWA) in Los Angeles, described “a new wave of immigrants” as a result of the situation in South Korea.

“These are people who had steady jobs, who never thought of moving overseas,” Park said. “[They] are undocumented workers just coming over through Canada and working in the low wage sector of the community.”

Park added that many hope to return to South Korea. “They left so much behind…but after three to five years, they tend to cope.”

Activists want to see the labor troubles in South Korea resolved.

“It’s hurting Korea’s overall standing in the world community,” said Stillman. “I would like to see the Korean government come to respect labor rights and its crackdown on trade unions to end.

Added La Riva: “They deserve to have jobs. They deserve to live in peace.”