KEB union threatens all-out strike
By Kim Jae-won
The labor union of Korea Exchange Bank (KEB) is planning to go on strike, immediately after Hana Financial Group takes over the bank, a source at KEB recently told The Korea Times.
The source said that all unionized personnel, including those working in overseas branches, have vowed to join the action, bringing the bank’s operations both domestically and overseas to a standstill.
The strike plan has been prepared in advance through consultations among union representatives to prevent Hana from taking over KEB, he said on condition of anonymity.
Unions have played the role of spoiler in previous acquisition processes, one notable case being the takeover of Koram Bank by Citibank.
Although the strength of the Korean labor movement has been weakened, its influence has proven to be strong enough to adversely affect any acquisition process, analysts say.
Meanwhile, the union officially says that it is planning other measures to make it difficult for Hana to take over KEB.
“We are considering every measure to thwart Hana’s takeover,” KEB Union President Kim Kwi-chul told The Korea Times. Kim has been re-elected and it is hard to determine whether he is jockeying for a better position to gain an upper hand in the eventual dealings with Hana. As a concrete measure, Kim said the union will not accept any CEO appointed by Hana Financial. “We will not allow the CEO to take a step inside the KEB headquarters,” he said.
KEB has about 4,000 unionized workers, half of its total workforce. KEB’s union officials say that it is protesting against Hana Financial not because they want to keep their higher salaries, but because they worry about the future of the lender after it takes over.
“Hana Financial has no management skills nor financial ability to manage KEB,” the union leader said.
Hana is reputed to offer smaller remuneration to its employees than the industry standard. KEB officials are worried about their job security because Hana is likely to conduct a sweeping reorganization, which certainly involves severe downsizing.
The KEB union argued that the Financial Services Commission (FSC) is doing Hana Financial a favor by moving to approve its plan, although the group has failed to fully explain its funding plan. Hana Financial is waiting for approval from the FSC to make KEB one of its subsidiaries.
The fourth-largest financial group in the nation signed a 4.7 trillion won deal with Lone Star Funds to buy its controlling 51 percent stake of KEB in late November.
Hana Financial said it has completed most of the financial funding, and will report it to the FSC as soon as possible.
“We have received applications from more than 10 investors both at home and abroad,” said a Hana spokesman. “We will finalize it in a boardroom meeting scheduled for Feb. 10,” he added.