S Korea's Kumho Tire workers to go on strike

SEOUL, March 30 (Xinhua) -- Union workers of Kumho Tire Co., tiremaker unit of South Korea's cash-strapped Kumho Asiana Group, said Tuesday they decided to go on strike from April 1 after announcing negotiation with the management on a planned layoff ended in failure.

UNION v. MANAGEMENT

According to the union, they failed to reach an agreement with the management on its 20th round of negotiation held earlier in the day.

If the two sides cannot narrow their differences on the planned layoff until Wednesday, it is inevitable that the union stands up against the management, the union said.

While the union is proposing a 10 percent decrease in basic salary, together with a 200 percent "return" of bonus, the management is suggesting to "cut" basic salary and bonus by 15 percent and 200 percent, respectively.

Amid the two sides refusing to compromise, the Kumho Tire management announced that it urged 193 of its employees to join early retirement program as there hasn't been any breakthrough, triggering union workers' harsh backlash.

"So far we have done our best to communicate with the management, proposing a compromise plan. But as the management did not respond, we think it is time to make a decision," the union told local media Yonhap News Agency.

The union will further decide on details of future plans, it added.

If the union starts strike as planned, the management said it will respond with closing the plant, which may lead into a severe clash between the two sides.

KUMHO TIRE'S LAYOFF PLAN AMID DEBT RESCHEDULING PROGRAM

On March 3, Kumho Tire's management announced a list of 1,999 workers to be laid off as part of its debt workout plan.

The union strongly opposed the plan, calling for a vote to decide on whether to go on strike once talks with management ended in vain.

On March 10, the union announced that the vote ended in favor of a strike, urging the management to proceed to the negotiation table in order to avoid a strike and withdraw the layoff move.

The decision came amid creditors of the tiremaker pushing for a debt workout plan, which the labor union has been against as it specified layoffs.

In return, creditors refused to provide further financial support as the company could not endorse the plan due to severe backlash.

In late December last year, Kumho Asiana Group's main creditor Korea Development Bank (KDB) announced to put two of the group's units, Kumho Industrial Co. and Kumho Tire Co., under a debt rescheduling program to pull the group out of liquidity squeeze.

The group was put into trouble after its planned sale of Daewoo Engineering & Construction Co. failed.

Due to the unfavorable report, shares of Kumho Tire Co. ended trading at 3,540 won (3.1 U.S. dollars) on Wednesday, down 5.73 percent from a session earlier.