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SEOUL -- Police said they would try to wait out a group of fired workers who have taken control of part of a factory complex at South Korean auto maker Ssangyong Motor Co., in hopes of avoiding a violent end to a plant takeover that has lasted nearly two months.
About 500 fired workers and 200 sympathizers remained holed up on Friday with homemade weapons in the company's car-paint facility after police earlier this week moved them out of the main factory.
The demonstrators used giant slingshots to fire nuts, bolts and other projectiles at police again Thursday. They spray-painted a message on the building that said, "If you are not going to talk, kill us all."
The fired workers, part of a group of 2,600 laid off in a bankruptcy restructuring this year, took over the complex in suburban Seoul seven weeks ago and shut down production. They want Ssangyong, the smallest of South Korea's five main auto makers by sales, to give back their jobs.
Though South Korea has a history of labor unrest, the trouble at Ssangyong stands out in a time when the government has persuaded many companies and unions to avoid confrontation during the economic downturn. The government pressed companies to use pay freezes, job-sharing and other methods rather than layoffs to curb costs, and it pushed unions to accept such measures.
Ssangyong's Saga
Key events in the company's history and performance.
View Interactive
* More interactive graphics and photos
But Ssangyong, which chiefly makes sport-utility vehicles, has long suffered financial difficulties and, like other struggling auto makers, was pushed to the brink by the global recession that began last year. It recorded its second-biggest loss ever -- 710 billion won, or about $567 million -- in 2008 when demand plunged as consumers coped with high fuel prices and the slowing economy. Vehicle shipments fell to 81,000, down from 122,000 in 2007.
This January, Shanghai Automotive Industrial Corp. of China, which bought Ssangyong in 2003, put the company into bankruptcy restructuring and gave control to a team of South Korean managers and bank creditors. The firm lost 265 billion won in the first quarter.
Under a restructuring plan approved by the bankruptcy court in February, Ssangyong planned to lay off 2,600 of its 7,100 employees. About 1,600 accepted a severance package. An additional 1,000 workers decided to protest by taking control of the company's manufacturing complex on May 31 and halting production. They posted signs around the complex that said, "Layoffs are murder."
The shutdown damaged Ssangyong's ability to emerge from bankruptcy restructuring. Car designers resorted to working on their laptops and meeting in storefront computer shops, which are usually filled at night with students playing online games. In June, Ssangyong produced no cars and sold 217, just 20 outside South Korea.
By last weekend, the number of fired workers still occupying the complex had dwindled to about 500, but they were reinforced by about 200 people from other unions and companies, government officials say.
On Monday, more than 2,000 police in riot gear moved into the complex and cleared the way for several thousand other workers to restart assembly lines. The fired workers retreated to the paint facility and have turned it into a fortress.
Police have used metal barricades to shield themselves as they have moved closer to the paint facility since Monday. They decided not to forcibly enter because the building is filled with flammable liquids. "We're waiting, for the time being," a police spokesman said Thursday.
The clash in part reflects the inflexibility of labor conditions that has long been one of the most troublesome issues in the South Korean economy. Because promotions follow a strict hierarchy and pay is based on seniority, South Korean workers in white-collar and blue-collar jobs tend to stay at one company.
In an interview before the plant takeover, Lee Chang-kun, a leader of the Ssangyong union who has become a spokesman for the fired workers, said, "We can't agree that the solution is cutting people's jobs. We would like to keep the total number of jobs and share the hardship together."
By EVAN RAMSTAD
http://online.wsj.com/article/SB124837489036876593.html
About 500 fired workers and 200 sympathizers remained holed up on Friday with homemade weapons in the company's car-paint facility after police earlier this week moved them out of the main factory.
The demonstrators used giant slingshots to fire nuts, bolts and other projectiles at police again Thursday. They spray-painted a message on the building that said, "If you are not going to talk, kill us all."
The fired workers, part of a group of 2,600 laid off in a bankruptcy restructuring this year, took over the complex in suburban Seoul seven weeks ago and shut down production. They want Ssangyong, the smallest of South Korea's five main auto makers by sales, to give back their jobs.
Though South Korea has a history of labor unrest, the trouble at Ssangyong stands out in a time when the government has persuaded many companies and unions to avoid confrontation during the economic downturn. The government pressed companies to use pay freezes, job-sharing and other methods rather than layoffs to curb costs, and it pushed unions to accept such measures.
Ssangyong's Saga
Key events in the company's history and performance.
View Interactive
* More interactive graphics and photos
But Ssangyong, which chiefly makes sport-utility vehicles, has long suffered financial difficulties and, like other struggling auto makers, was pushed to the brink by the global recession that began last year. It recorded its second-biggest loss ever -- 710 billion won, or about $567 million -- in 2008 when demand plunged as consumers coped with high fuel prices and the slowing economy. Vehicle shipments fell to 81,000, down from 122,000 in 2007.
This January, Shanghai Automotive Industrial Corp. of China, which bought Ssangyong in 2003, put the company into bankruptcy restructuring and gave control to a team of South Korean managers and bank creditors. The firm lost 265 billion won in the first quarter.
Under a restructuring plan approved by the bankruptcy court in February, Ssangyong planned to lay off 2,600 of its 7,100 employees. About 1,600 accepted a severance package. An additional 1,000 workers decided to protest by taking control of the company's manufacturing complex on May 31 and halting production. They posted signs around the complex that said, "Layoffs are murder."
The shutdown damaged Ssangyong's ability to emerge from bankruptcy restructuring. Car designers resorted to working on their laptops and meeting in storefront computer shops, which are usually filled at night with students playing online games. In June, Ssangyong produced no cars and sold 217, just 20 outside South Korea.
By last weekend, the number of fired workers still occupying the complex had dwindled to about 500, but they were reinforced by about 200 people from other unions and companies, government officials say.
On Monday, more than 2,000 police in riot gear moved into the complex and cleared the way for several thousand other workers to restart assembly lines. The fired workers retreated to the paint facility and have turned it into a fortress.
Police have used metal barricades to shield themselves as they have moved closer to the paint facility since Monday. They decided not to forcibly enter because the building is filled with flammable liquids. "We're waiting, for the time being," a police spokesman said Thursday.
The clash in part reflects the inflexibility of labor conditions that has long been one of the most troublesome issues in the South Korean economy. Because promotions follow a strict hierarchy and pay is based on seniority, South Korean workers in white-collar and blue-collar jobs tend to stay at one company.
In an interview before the plant takeover, Lee Chang-kun, a leader of the Ssangyong union who has become a spokesman for the fired workers, said, "We can't agree that the solution is cutting people's jobs. We would like to keep the total number of jobs and share the hardship together."
By EVAN RAMSTAD
http://online.wsj.com/article/SB124837489036876593.html
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