3,000 union workers of the Kumho Tire, South Korea’s second-largest tyre manufacturer, went on a full-day strike after the labour and management’s different views on the new Peak Wage System the company is trying to implement. Three production facilities of Kumho including, Gwangju, Gokseong and Pyeongtaek were affected by the workers’ strike.
The company, during the annual wage talks, conveyed its idea to adopt the Peak Wage System to increase its competitiveness, while the unionists think that wage talks should not be mixed with the peak wage issue.
If the Peak Wage System is adopted, then the employees must accept reduced salaries in return for the guarantee of employment till retirement. The idea behind this system is to use the money saved for hiring of young workers.
“The company has been destroying the labour-management relationship by enforcing the Peak Wage System,” said the Kumho Tire chapter of the Korea Metal Workers Union during a press briefing at its Gwangju plant on Monday.
“We agree with the good cause of creating jobs for youth, but we think the decision on the new system should wait until next year,” it added.
During the 16 negotiation meetings, the union workers put forward their demand of 8.3 per cent salary hike, along with allocation of performance-based pay for the last year without any strings attached. The company has countered this proposal by offering 1900 won increase in daily pay and a 3 million won bonus but on a condition that Peak Wage System is implemented. They also offered to increase the retirement age to 61 years.
One of the worker said, “The company claims that without the Peak Wage System, it has no ground to persuade its creditors for the bonus payment,”
“The company has posted a record 358.4 billion won operating profit and also has cash reserves of 640 billion won, which cannot be made without the sacrifice of workers. However, the company is not trying to share the profits with its employees,” the worker added.