Wages, Bonuses Frozen at Kumho Petrochemical
One of Kumho Petrochemical’s main businesses is the production of synthetic rubbers, much of which is supplied to the tyre industry. The company’s Ulsan plant in South Korea alone produces in excess of half a million tonnes of synthetic rubber per annum. To tackle the company’s recent economic crisis, in late January the Kumho Asiana division’s labour management negotiation committee met with the three main labour unions representing Kumho Petrochemical employees at its Ulsan rubber and plastic facilities and its Yeosu rubber plant and reached an agreement on a number of matters.
The committee and the unions, Kumho reports, agreed that annual performance based incentives, which range between 100 and 200 per cent, will be returned to the company. The South Korean company adds that other employees “agreed to a wage freeze for two consecutive years”, while executives “decided to return a portion of their annual salaries” – an amount equalling 10 per cent for 2009 and 20 per cent for 2010 – to the company for two consecutive years. The union representatives and company management, Kumho adds, also agreed to work in partnership to achieve “management normalisation” by achieving a significant reduction in costs and improvements in productivity and efficiency.
The company says it held the meeting to “set an example” for the corporate restructuring that has been held at group level in order to overcome the current crisis and position the company for new growth through cooperation between employees and management. With labour unions giving their consent for management to determine wages for two consecutive years, Kumho says it has “successfully maintained its tradition of zero-conflict labour management cooperation” during the 23 years since the establishment of its labour unions.
“By unveiling our labour management model for co-prosperity at this meeting, we have again set an example of good labour-management relations based on mutual trust and respect,” commented a company spokesperson. “We have also improved confidence in our ability to overcome the current management crisis.”