Hospital crews join mass strike in South Korea

Bloomberg News Service

SEOUL, South Korea — A nationwide strike by as many as 63,000 union workers at Korean Air Co., Asiana Airlines Co., chemical makers and other companies widened in the second day as employees at 11 hospitals walked out.

Riot police climb a chimney to disperse striking protesters at the Hyosung factory in Ulsan, about 250 miles southeast of Seoul. Union members at the South Korea's largest nylon plant walked after management replaced 24 workers with machines. Associated Press

"Restructuring is painful for now, but it is an inevitable solution to saving the nation and revitalizing the economy in order to create more jobs," President Kim Dae-jung told the Cabinet yesterday. "If we do not continue reforms, we will not be able to survive competition."

Widespread strikes, lack of progress in Kim's "sunshine policy" to engage North Korea and the worst drought in centuries have helped pushed the president's popularity rating to an all-time low.

"The gods are punishing South Korea with no rain for Kim's sunshine policy," according to one criticism posted on a presidential office Web site that invites public comment.

Kim, who has 18 months remaining in his five-year term, will face "a tougher time pushing ahead with reforms," said Go You-sun, an economist at Meritz Securities Co. in Seoul.

"The strikes can delay Korea's economic pickup and deter already-falling foreign direct investment," she said. "The strikes show the president has lost popularity among laborers who supported him before he took office."

The Korean Confederation of Trade Unions, the more militant of the nation's two labor groups, said an additional 15,000 workers walked out of 11 hospitals, joining about 48,000 union members striking at more than 120 locations since yesterday.

Korean Air, Asia's largest cargo airline, is operating only 65 flights today, or 18 percent of 356 daily flights, as members of its pilots union stay off work, it said. The strike involving ground staff at Asiana will force the No. 2 carrier to cancel 60 percent of its 205 domestic flights.

Ahn Kyung-duk, an official at the Labor Ministry's dispute monitoring division, estimated the number of striking workers yesterday at 15,000, saying the government hopes to solve the disputes by Saturday.

"The labor movements can't win public support to justify their demands," Meritz's Go said.

Taiwan's Quanta Computer Inc. cited labor problems as the main reason it's staying away from Korean companies such as Hynix Semiconductor Inc. Hynix is selling its flat-panel display business, with Taiwanese and Japanese companies the leading candidates.

"It is very tough trying to manage a Korean company, especially its labor force," said Tim Li, chief financial officer of Quanta, Taiwan's largest notebook computer maker and the owner of a flat-screen maker.

The strikes may slow the economy, which expanded just 0.3 percent in the first quarter from the fourth. Korea may revise down its forecast for economic growth to 4 percent to 5 percent, from 5 percent to 6 percent, Yonhap News said. It grew at an 8.8 percent pace last year.

Intermittent strikes since April have cost 21 companies about 170.2 billion won, including $31.6 million of export losses, as of yesterday, the Ministry of Commerce, Industry and Energy said in a statement.

Korean Air and Asiana say the strikes will cost them 21 billion won ($16 million) a day, including hotel bills for stranded passengers.

"Talks with the pilot union remained at a standstill even as we tried hard to bring about a compromise overnight," Korean Air spokesman William Han said. "Talks are ongoing to end the strike as soon as possible."

Korean Air shares fell 2.1 percent to 7,110 won while Asiana shares dropped 0.5 percent to 2,110 won in early trading.

Other strike participants include unions at Samho Heavy Industries Co., Korea's fourth-largest shipbuilder, Doosan Heavy Industries and Construction Co., the nation's sole power-generation equipment maker, Youngchang Co., a piano maker, and Daedong Industrial Co., an auto-parts maker.

Unions at synthetic fiber makers Hyosung Corp. and Kohap Ltd., which have initiated work stoppages at plants in Ulsan, also joined the industrial action.