Management, Labor Should Admit and Rectify Their Wrongs

One of the most difficult things for business enterprises to do is to enhance managerial efficiency and satisfy unionized workers' demands simultaneously.

But that is the task facing most of Korea's public corporations that have long been labeled as symbols of the ``high-cost, low-efficiency'' industrial sector, which requires concerted efforts from both labor and management.

In this regard, the corporate prospects appear quite dim for KORAIL, a state-run rail company which has been on strike for five days since Thursday, with the employer and employees blaming each other for their problems.

The labor criticizes the management for abruptly ― and unilaterally ― terminating their collective agreement, but the latter says the accord no longer reflects the changed Labor Law properly. In response to the union's demand for annual wage hikes, the company has replied that the current pay levels are high enough for a firm reeling under huge losses and accumulated debts.

Worsening the already bad labor-management relationship this year is the Lee Myung-bak administration's drive to reform the public sector, a campaign which is beyond dispute itself. We have also long stressed the need for reforming inefficient state enterprises, long been symbolized by ``iron bowls.''

Yet, one also needs to ponder what has made ― almost encouraged ― this corporate sleaze. Successive presidents placed their aides, who had made contributions to their election, as heads of state firms, sharply weakening the managerial legitimacy at the top and making themselves vulnerable to unions' attacks. Also, some administrations, including the incumbent one, have passed on their own deficits to state companies, as shown by the government's latest measure to have the Korea Water Resources Corp. shoulder about 8 trillion won to finance the construction of a canal linking Seoul and Incheon, one of President Lee's pet projects.

In addition, restructuring ― a euphemism for organizational trimming ― usually focuses on low-echelon workers instead of managers and executives. So much so that at one state company, only three managers left their posts while 7,000 low-level employees were axed. This is regrettable, considering the much-hackneyed term of ``noblesse oblige'' should be applied to business sector as well, especially the highly-hierarchal public corporations.

Commenting on the rail workers' strike, President Lee said: ``The walkout by unionized workers of public corporations, who are guaranteed lifetime job security, cannot and should not be understood by the people.''

This is hardly different from the presidential ban on strikes by employees at state enterprises, ignoring one of their labor rights and encouraging the management to become unnecessarily tougher in dealing with organized labor.

President Lee might be recalling the hard-ball tactics of the Reagan-Thatcher days, which earned praise at the time, mostly from conservatives, but have now proven to have sharply widened social division. And the time has long past for the domestic media to stop attacking ― almost automatically ― unionized workers whenever they put down their tools, under the pretext of protecting the national economy and public convenience.

No one opposes reforming all sectors of the economy, including some labor aristocrats at big businesses and state enterprises, but leaders and governments should make them follow by setting good examples. A good place to start is to guarantee their independence in financial operation and personnel management, and demand far higher efficiency.