SEOUL (Reuters) -- South Korea traditionally faces a summer of strikes every year, but workers will likely find management in no mood for compromise this time around as domestic economic growth is slowing.
The economy is struggling with a weakening pace of exports and a patchy revival in domestic demand, while a bribes and fraud scandal has tainted the Korean Confederation of Trade Unions (KCTU), an umbrella organization.
"Given a weak economy and damaged credibility, unions will find it hard to win public support. Lodging any strong industrial action is just like digging their own grave," said Huh Chan-guk, an economist at Korea Economic Research Institute.
Workers at automakers Hyundai, Kia Motors Corp. and GM Daewoo Automotive are all pushing for higher wages.
Economists say it is difficult to get a fix on how severe union activity could be this year.
Commerce Ministry figures indicate labor disputes so far in 2005 were having less of an impact on the economy than last year.
It said 462 strikes reported last year caused around 1.7 trillion won ($1.69 billion) in lost production.
With half of 2005 almost completed, only 52 cases have been reported, less than half the 142 cases reported in the same 2004 period, the ministry said.
But Labor Ministry data showed 17.7 percent of 6,228 workplaces with more than 100 employees had struck wage deals by the end of May, lower than a year-earlier 18.9 percent, indicating more labor disputes could be brewing.
"Overall, unions will be softer in their attitude, hit by strong public criticism over union corruption," said Keum Jae-ho, a senior economist at the government-funded Korea Labor Institute.
"Union morale is low but we can't completely rule out the possibility that they would try to flex their muscles to show they still have strength."
WAGES, BONUSES, TECHNOLOGY
The tone could well be set by Hyundai's union, the country's biggest and most powerful member of the militant KCTU.
Hyundai's 42,000-strong union is demanding higher wages and bonuses, while the management wants to revise an agreement that requires the union to approve new technology or the building of plants abroad.
"A stronger, prolonged, costly dispute appears inevitable." said Park Sung-jin, an analyst at Hannuri Investment Securities.
A Hyundai union survey showed 63 percent of 2,164 respondents would actively participate in industrial action if their demands were not met.
Another flashpoint could come later in June.
The KCTU, backed by 600,000 members, plans to call a general strike later this month if parliament pushes to pass controversial legislation the union says would allow companies to hire more temporary workers.
Foreign investors cite labor unrest as the main deterrent to doing business in Korea and local share prices suffer from the so-called 'Korea Discount' linked to poor corporate governance as well as frequent industrial action.
Korean workers in manufacturing earn on average $6.66 an hour, compared with $16.74 for U.S. workers, $15.78 for Japanese workers and $4.99 in Taiwan, Korea Labor Institute data shows.
The KCTU has seen its image tainted after media reports that some union leaders took bribes from job seekers and misused union funds. The KCTU issued a statement apologizing.
Korea's public prosecutor is investigating.