 Kumho Tires unionists had resisted the management’s debt-restructuring program, which included the layoff of about 1,000 workers. Workers and officials at the company reached an agreement over salaries and working conditions, Sunday, with the management reversing the plan for the mass layoff. / Korea Times File |
By Kim Hyun-cheol
Staff Reporter
Management and the union labor of Kumho Tires came to a dramatic settlement Sunday in wage and collective agreements during last-ditch negotiations, keeping alive hopes for putting the troubled company back on track.
Both parties came to an agreement on all major issues in their collective bargaining in the 26th round of negotiations, nine days after the tentative terms were rejected by employees, the company said.
Under the final agreement, the lay-off decision previously issued for its 189 workers will be withdrawn on the condition of submitting written promises for abiding by company regulations. The measure, however, will be active again in case of violations, Kumho Tires added.
A plan to shed an additional 1,006 workers will also be annulled if the agreement earns the approval from employees in a consequent vote.
Their previous talks on Saturday broke down again, raising fears of inevitable court receivership or bankruptcy for the company. Ultimately, with the agreement, however, Kumho Tires gained a foothold in a bid to undergo a debt rescheduling program, dodging the worst scenario, industry watchers say.
An emergency injection of cash will be available from creditors if the agreement is finalized, which will help cover five months of overdue payments to Kumho Tire workers and also lead to the resumption of full operation of its plants.
"A consensus between management and the labor union that the current process should be maintained led to the final agreement in the end," it said in a statement. "We hope that similar sentiment will be reflected in the upcoming vote too."
Unionized workers vote on Wednesday.
Earlier this month, employees vetoed a tentative agreement that would have caused all current processes under a debt restructuring program to be temporarily halted. The voted-down draft included a 10-percent pay cut and abolishment of most of the benefit system in exchange for withdrawing the layoffs.
Two affiliates of the local conglomerate Kumho Asiana Group, Kumho Tires and Kumho Industrial, were put under a debt rescheduling program by its main creditor, the Korea Development Bank.
The business group had been suffering a cash shortage caused by the delayed sale of Daewoo Engineering & Construction, a key part of the restructuring of the country's ninth-biggest conglomerate. Kumho Asiana bought Daewoo in 2006 in a highly leveraged deal.
