correspondent Donald Kirk has written a trail-blazing book in this,
the first major study of the inner workings of a Korean chaebol
or conglomerate. Kirk, over the course of six years, probed deep into
the inner fabric of the Hyundai group in pursuit of the story of the
Korean economic "miracle" since the end of World War II and the end of
Japanese rule over the Korean peninsula.
the basis of scores of interviews with members of the Hyundai family,
from founder Chung Ju Yung to vice presidents, managers, clerks and
assembly-line workers, Kirk traces the rise of Chung, his family, and
Hyundai from a sidestreet garage to international giant in more than
40 areas of industry and finance. The story ranges from wartime
construction, to the factories and labor strife of "Hyundai City,"
Ulsan, to the scene of controversial new Hyundai enterprises in
electronics and motor vehicles in California, to Chung's attempt to
win a political position commensurate with his economic power in the
1992 presidential elections.
"A wealth of detail and
China Morning Post
"Full of fascinating
anecdotes related in a lively style by journalist and Korea-watcher
Donald Kirk....Blow-by-blow accounts of high-stakes gambits that show
Hyundai epitomizing both the positive and stultifying features of
Eastern Economic Review
"A must read for business
people and students of business and the social sciences learning about
the socio-economics of Asia. While much has been noted (though little
understood) about Sumitomo, Mitsubishi, Mitsui, Dai Ichi, Sanwa, Sony,
Toyota, Toshiba, NEC, Matsushita, et al. – the huge commercial engines
that run Japan's economic machine – there has been relatively little
in-depth analysis of the great Korean chaebol – the architects of
South Korea's economic miracle....Kirk takes us on an impressive
journey through this unexplored territory, exposing with meticulous
detail the inner workings of a Korean conglomerate, the unique
character of Korean business and how it interacts with its government
and with foreigners, and the glaring and subtle differences between
doing business with Korea and Japan."
"Although the so-called
South Korean miracle has attracted much attention, there have not been
many books that deal with this subject, certainly nowhere near as many
as those on Japan's business structure and practices. That alone makes
this book a valuable contribution toward redressing the imbalance."
"I enjoyed reading the
book, and I would strongly recommend it to any persons interested in
learning about business in Korea and/or doing business with Korean
"An interesting and
informative book and I would recommend it above virtually all other
English-language books on South Korean business....[The book] offers
a wealth of information that should be reckoned with by all serious
students of contemporary South Korean economy and society."
"Mr. Kirk's thorough and
well researched account plots Hyundai's astonishing trajectory, and
how it leapt boldly into new products and markets wherever there was
business to be had....Anyone with an interest in Korean business
should read Mr. Kirk's book."
"This is an excellent book
to assign in courses on contemporary Korean history and politics. [It]
offers an outstanding introduction to how South Korea became rich and
some of the cultural problems that accompanied the process and that
can be expected to continue in the future."
The Journal of Asian Studies
"A unique contribution...a
story that has cried out for telling. Hardly anything has been said
about the huge Korean chaebol which are a kind of hybrid between
pre-war Japanese zaibatsu and the current keiretsu."
author, The Pacific Century and Korea's Quiet Revolution
"Don Kirk tells you what
Korean business is about and how it interacts with its own government
and foreigners as no one else has. He differentiates clearly between
doing business with Korea and Japan. A must read for business people
and students learning about business in Asia."
author, Gaijin Kaisha
"Account of Korea's largest
chaebol, told in the context of Korea's rise from a Third World to a
world-class economic power....Recommended for executives, scholars
and students of business and the social sciences."
"A must read for foreign business people and students learning
about doing business in Asia."
Jackson N. Huddleston, Jr., University of Washington
REVOLT IN THE WORKPLACE –
The Battles of Ulsan
The governments of Park Chung Hee and Chun Doo Hwan did not
believe in the right of workers to organize independent unions,
much less to strike. The history of the labor movement for the
generation after the Korean War was one of subterranean struggle
in which workers were routinely arrested, tortured and sentenced
to prison terms for organizing resistance to the excesses of
management and their collaborators in company "unions." The
police under Park and Chun were so harsh that they could – and
did – smash any sign of worker revolt as soon as it appeared.
Hyundai epitomized this attitude. The group, from Chung Ju Yung
down to the lowliest manager, was repressive even by Korean
standards. Chung at heart believed factory workers should obey
blindly as did day laborers in the construction industry, where
anyone bold enough to talk back, much less complain, was fired on
It was not until the five years of democracy under Roh Tae Woo
that workers were physically capable of staging open, mass
demonstrations similar to the shows put on by radical students in
Seoul and other cities every spring for years. Several factors
contributed to the dramatic rise in overt labor unrest under Roh – a circumscribed freedom, the new affluence of Korean industry
and a bursting of long-repressed tension among workers who knew
the owners of their companies were enriching themselves at their
expense. The confrontations at Hyundai were the most visible and
violent of any during this period. To Chung Ju Yung, the proper
answer to force was force. Chung was not alone among
chaebol chairmen in this response. Conditions could also
be rough in other groups – especially in small and medium-sized
industries able to isolate and crush dissent without so much
publicity. Still, Hyundai, with more blue-collar workers in one
place than any other organization, seemed the most vulnerable to
Suppression of workers, to be sure, was not always a matter of
naked greed and cruelty. It also reflected the deep belief of
Korean leaders and planners in the virtues of unremitting hard
work for the sake of enterprises whose every victory against
foreign competition was a triumph for the nation. Hyundai and
Samsung resolved to stamp out dissident union activity. Samsung
succeeded, mingling pressure with incentives to prevent unions
from organizing despite strikes and sit-downs. Hyundai failed as
a result of strategic blunders as well as the concentration of so
many of its workers from so many companies in one community.
Hyundai in the pre-democracy period did all it could to wipe out
worker dissent, forming a militia at Hyundai Heavy Industries
along with "save-the-company squads" made up of loyalist workers,
hired goons and security guards. The company alternated between
extremes, one day beating dissidents, the next day bribing them.
Hyundai and other companies acted with the confidence that the
law was on their side. The Federation of Korean Trade Unions, the
umbrella group to which many of the company unions belonged, was
closely linked to the government. Workers could not legally
organize as long as another union was duly registered to
represent them. There was no effective machinery for negotiating
disputes. The government, if it wished, could bring the national
security law to bear against workers, just as it did against
students. Several weeks after Park's assassination in October
1979 a worker at HHI was arrested after loaning a friend a book
about the rise of the American labor movement. A court found him
not guilty, but HHI forced him to resign. This episode, according
to Kwon Yong Mok, the first radical organizer at HHI, the "Walesa
of the Ulsan shipyard," marked "the beginning of the labor union
The kind of offenses that HHI committed against its workers
during that era could not have happened in an advanced capitalist
country. Nor could they have happened in Korea much after 1990.
Kwon, who was to spend four years in prison for trying to
organize a union at HHI, offered some of the history in a series
of articles. Hyundai Electrical Engineering, he wrote, had
decided in 1986 that workers would only be paid for up to 50
hours a week no matter how many hours they actually worked. Those
who objected were transferred to Seoul. Then, when the company
failed to explain why some workers got an annual bonus of 500% of
one month's pay while others got only 150%, dissidents put up
posters demanding the resignation of Chung Ju Yung, who had
dreamed up the idea as an incentive scheme. "We did not have any
success," said Kwon, "but we showed our fellow workers what the
united movement could do."
The realization that Hyundai was earning tremendous profits in
an era of unparalleled prosperity for Korea contributed to the
movement. "The annual growth of Hyundai was 30%, but our raise
was always around 3% or 4%," according to Kwon. "We concluded
that we should request a 15% raise." Hyundai Electrical
Engineering executives replied by claiming that "Hyundai seemed
to be making profits but actually was barely making ends meet."
The workers, getting nowhere, sang radical songs at lunchtime
soccer games two days in a row and then returned to duty 30
minutes late each time. Activists decided the time had come to
form a union and make formal demands ranging from special payment
for pollution to summer vacation pay. "Since Chung Ju Yung's
policy was never give permission for a labor union," Kwon wrote,
"we thought of the strike and demonstration as our only
The organizers believed they had a better chance of
recognition by the company after Roh ushered in democratic reform
on June 29, 1987, ending days of violent demonstrations in Seoul
and other large cities. More than 100 workers met in a wedding
hall in downtown Ulsan several days later, held a ceremony and
filed papers at Ulsan City Hall. Hyundai Electrical Engineering
accepted the union on July 14 after the workers staged a series
of rallies. The workers' struggle in Ulsan was on the threshold
of a new era, but executives at other much larger Hyundai
companies were not about to accept the union movement so easily.
They tried to block the registration of the union at Mipo
Dockyard, stealing the paperwork and blocking meetings before
Kwon's next goal was to form a union at HHI, the big one, with
more than 20,000 workers. The battle for HHI really began on July
28 when Kwon led his dissident workers into the compound
shouting, "Down with the company labor union, choose the
democratic union." After a four-day strike, management agreed on
a number of concessions and an election for a new chairman on
August 14. The radicals' candidate, Lee Hyung Gon, won easily –
"a perfect victory," said Kwon, "for what the managers called
`uneducated and rude laborers.'" If HHI managers never publicly used such words,
the quote revealed the sense of inferiority imbued among workers by
the company's attitude – as much a factor as anything else in inciting
them to a revolutionary zeal reflecting severe class differences as
well as disparities in income and privilege., part two, July 25, 1988.
Kwon's moves to organize workers at the HHI compound,
beginning with Hyundai Electrical Engineering, paralleled a
similar drive at Hyundai Motor, which had about as many workers
as HHI at the time. "As soon as we heard that a labor union was
formed at Hyundai Engineering, we were firmly assured that we
could form our own union," wrote Lee Sang Bum, who formed the HMC
union on July 24. The mood at HMC turned ugly when word spread
that management had formed its own company union first. "About
20,000 laborers gathered by lunch," said Lee. "We set up a mike
and told them how the Hyundai Motor Company had set up the
company union." HMC executives fell back on talk about
"legitimate process" when confronted by Lee. "As time passed by
without any solid answers," he said, "the laborers who had
gathered got angrier and began to break the windows of cars
After 12 tense hours, however, HMC managers had the good sense
to agree on the resignations of the stooges they had installed as
leaders of the HMC union and allow an election. The new union
leaders quickly got management to agree on lesser points –
providing paid vacation time, abolishing forced overtime, running
the assembly lines at proper speeds instead of revving them up to
increase production. There was even agreement that workers did
not have to adhere to the short hairstyle the managers demanded
of the troops. Lee was not deterred by the failure of
demonstrations to bring about a pay raise too. "We showed that we
workers could unite together and fight for victory," he wrote.
At the neighboring Hyundai Precision compound, pandemonium
broke out when the managers failed to show up to talk to
representatives of a new union. "Angry workers occupied the
streets and blocked them, and the national police began to shoot
teargas," wrote Kwon. "A lot of workers were wounded, and later
three of them were arrested." Kwon saw the violence as
"understandable considering that Precision had the worst labor
conditions" and "workers there had to handle polluted substances
with the lowest wages." Workers around the same time formed
unions at Keumkang Development, owner of the Diamond Hotel and
Hyundai Department Store, both across from HHI, and Korea Flange,
the company of Chung Ju Yung's brother-in-law.
Although workers in Ulsan managed to form their own unions
with a minimum of obstruction in the summer of 1987, Hyundai
still had not fully accepted reality. When workers organized a
federation of unions to counter the power of the Hyundai group,
real trouble broke out – a foretaste of the bitterness of the
next few years. Managers refused to meet with representatives of
the new federation, and six Hyundai companies closed their doors.
Thousands of workers demonstrated outside the HHI compound, the
gates blocked by concrete and a 1,000-ton chunk of a ship's hull
lifted into place by a crane. The ranks of the demonstrators
swelled to about 40,000 the next day for a march to the stadium,
where the workers staged a rally at which union leaders agreed
with a deputy labor minister on negotiations by September 1.
Chung Ju Yung, recognizing the federation at last, assented to
the same deadline in talks with demonstrators at Hyundai
headquarters in Seoul.
The old man displayed his grip over his family as well as
Hyundai when HHI staged a press conference on August 19 to
publicize the agreement. There was sixth son Chung Mong Joon
seated on a chair in front next to union chief Lee Hyung Gon
while his father watched from the second row. Mong Joon hesitated
in answering questions, however, since he had come home from
graduate study only a few days earlier to assume his newly given
job of HHI chairman. Whenever he couldn't answer, his father
spoke up, said Kwon, showing he was "still the superior leader in
Hyundai." The elder Chung's replies did not inspire confidence.
Somehow the agreement "planted a strong distrust in the leaders
of the union" – thus having "a strong impact on the strike
against HHI in September."
An air of excitement permeated Kwon's writing as he talked
about the demonstrations that summer of '87. "Although later we
realized how worthless a written compromise was, at that time it
was our victory" to form real unions and get Hyundai to recognize
the federation too. It was a victory "achieved not by a few union
members but by the efforts of all the laborers and the support of
their families," he wrote, heady with the memory of his triumphs.
"They were not afraid to sacrifice themselves." He recalled
fondly "the line of workers which extended 16 kilometers" from
HHI to the stadium. The display proved "what they really wanted
– it was all possible because we were united into one, and we
had won our first symbolic battle for laborers."
The glory days were brief. One by one negotiations either
broke down or resulted in agreements not acceptable to a majority
of workers. Negotiations at HHI were doomed when Lee Heun Tae,
Chung Ju Yung's hard-as-nails money man in Seoul, was named to
represent HHI in all-night talks. Fighting broke out after
management refused to make its offer of a pay increase
retroactive to March. HHI was suspected of hiring goons to break
windows and destroy facilities at the stadium during a rally.
"They stirred people to be violent," said Kwon. "When the
laborers got suspicious, they caught five of them and found out
that they were not Hyundai laborers. After questioning, they were
sent to the police only to be released immediately" – the usual
story of collusion between authorities and owners.
The atmosphere quickly worsened. "By now the issue was no more
the wage increase but the release of all arrested workers," said
Kwon. HHI this time not only shut down the factory but cut off
water and electricity and closed the cafeteria. Kwon saw hope for
the future when "family members helped the laborers both mentally
and physically, and each different family helped the other family
who was in trouble." Euphorically, he perceived "a significant
event as the family not only participated but led the way in a
struggle for survival." Then when police moved in on a crowd,
arresting a number of demonstrators, "they were questioned for
five days without any sleep or food," said Kwon. "They were
ordered to sign a statement that they were the ones who set cars
on fire, but the laborers rejected all this." It got worse.
"Police were arresting anyone who spoke harshly or violently."
There were "suicides by laborers who were sought by the police"
– but some suspected the police killed them.
For Kwon, the worst was yet to come. He was arrested in April
1988, shortly before the first of his articles on the drama of
the previous year was published. The police grabbed him in a
round-up of union leaders after a scuffle inside the HHI gates,
and a court sentenced him to four years in prison. "He was a very
honest man," said Phee Jung Sun, a labor organizer in Seoul.
"That was why he got widespread support from Hyundai workers."
For Hyundai bosses, every challenge, every demand put forward by
workers had to be a confrontation. Most of their campaigning
against the unions was clandestine, veiled by cover-ups and
bribes, but sometimes the group was embarrassed by exposure that
showed why the workers had to fight as hard as they did. One of
the most revealing episodes occurred not in Ulsan but in Seoul,
not to a blue-collar worker but to a white-collar organizer right
in Hyundai headquarters. His story, as a result of the publicity
it received, also marked a turning point in Hyundai's relations
with its employees.
The time was 10:30 p.m. on a balmy spring evening, May 6,
1988. The place was Seoul's Kangnam district, a relatively new
area of fashionable apartment blocks and office buildings,
nightclubs and restaurants, south of the Han River – several
miles from the central City Hall square, the ancient palaces, the
downtown hotels and soaring business complexes and the Hyundai
headquarters building, all in the overcrowded wards north of the
river. Suh Jung Eui, a 10-year veteran at Hyundai, an economics
graduate of Pusan University, now relegated to clerical work in
the Hyundai group headquarters building, was standing outside a
bar. "My seniors suggested I have a drink with them," said Suh.
It was not an invitation a clerk was likely to decline. It
promised not only an evening of wining and dining on the expense
account but also a chance at ironing out some "misunderstandings"
resulting from Suh's role as founder and president of the Hyundai
Engineering and Construction Workers' Union, the first Hyundai
union made up of office workers, not hardhats in factories or on
construction sites. "I disliked the authoritarian
administration," Suh told me much later. "Our employers were
taskmasters. Our company chairman, Lee Myung Bak, was a
specialist in management, but he didn't follow regular rules on
labor. I did not like that." Naturally, "When I tried to
establish a trade union, the company tried to make me give up the
Anticipating some quiet backstage palaver, Suh was only a
little surprised when he got to the rendezvous point to see six
men whom he did not recognize. They looked more like thugs from
another part of town. Assuming his "seniors" would be coming
right along, Suh was still more surprised when the thugs shoved
fists and fingers into his back and elbows and ordered him into a
waiting luxury car – a black Royal Salon made by Hyundai rival
Daewoo. "They put me on the floor with their feet on top of me. I
got a scar on my body" – a point he illustrated by revealing a
bluish bruise on his left leg that he said was caused "by
friction between the seats." For five hours he remained in that
position as the car plied the expressways to the southwestern
port city of Mokpo, by coincidence the birthplace of radical
opposition leader Kim Dae Jung.
When he got to Mokpo, Suh found himself "in a small room in a
private house" where "at first they tried to make me eat food
with a blindfold on." When he refused the food, "they took off
the blindfold, and I ate a very little, just two spoonfuls and no
more." His captors remained silent while he ate, after which one
of them announced "they would kill me with knives." That said,
Suh was held for four days, at which point "they urged me to
write my resignation letter to the company. I had to write such a
letter. They threatened to kill me."
Next, "I was pushed into a big suitcase," Suh talked on. "I
refused to get in, but one of them said they would not lock the
suitcase so I agreed." The leader of the group then went out in
search of a bigger and better suitcase – apparently deemed a
handy way to move Suh and not create too much attention – and
left him with the others in the room. "Without their leader, the
others kept silent," he said. "I felt the threat of killing."
Understandably enough, "I also felt dread." Finally, the leader
returned without a suitcase but with the much happier idea of
drinking some soju, the traditional Korean wine.
"After he was drunk, he said they would release me in a remote
place," said Suh. "I told them my life story." He also did some
proselytizing on behalf of the labor movement and the union. He
was not, he observed, the first union member to be kidnapped.
Indeed, he was luckier than some who had been severely beaten,
endured threats to their families or been "disappeared" entirely.
"I persuaded one of the hoodlums to request their leader not to
do any more kidnapping," said Suh. At the same time, he spread
some propaganda on behalf of the labor movement – and believed
he had convinced the hoodlums of its value to their friends
working in factories.
"I told them the trade union helped workers," said Suh.
"Without the union, the workers would suffer." His kidnappers,
drinking whiskey, moved him to a yogwan, an inn of the
sort where men stayed while traveling. Apparently they were
deciding it was time to abandon their mission – whatever,
exactly, it was. Could it be that whoever hired them in the first
place was dictating their every move? Probably so, but Suh barely
grasped what was happening. "I woke up in the early morning of
May 11, but I didn't know where I was."
Discovering he was alone, Suh left the inn and hired a taxi to
take him all the way to Seoul without calling or contacting local
authorities. "I went straight home," he said. The reason the
kidnappers decided to let him go was clear as soon as he got
there. "The police were in front of my home. I was surprised to
see them there. They were looking for me. They said they set up a
special squad to search for me during the kidnapping period."
Were the police about to close in on the kidnappers when Suh was
freed? Was their investigation so rudimentary as to cover only a
stake-out at his house and routine questioning at Hyundai?
These questions, like those in many other cases, raised the
deeper issue of the relationship between the police and the
authorities. What made the story of Suh Jung Eui so incredible
was not so much what happened to him as who he was – a
white-collar worker, a college graduate decked out in
conventional white shirt, striped tie, gray slacks and, not so
typically for a Korean "salaryman," tweed jacket. Suh believed
that Lee Myung Bak, Chung Ju Yung's right-hand man, was
"directing that operation" against him, but how could he be
All Suh knew for sure was that a member of the board of
Hyundai Engineering and Construction, Choi Jae Dong, and the
director of its general affairs department, Kang Myong Ku, were
arrested for ordering the kidnapping, paying the six hoodlums the
equivalent of about $27,000, and later sentenced to a year apiece
in jail. As for the hoodlums, they got off amazingly well. As
hired hands who had done no bodily harm to their victim, they
were given suspended sentences and put on probation. Choi, as an
elderly man in semi-retirement, got out early, leaving only Kang
in jail. Then Kang too was released on medical grounds amid
reports that he had threatened to go back on the Mafia-like
undying loyalty that had bound him to Hyundai, and expose the
roles of his top bosses in the plot if they did not help him get
"So the company got Kang released," said Suh, even though
Chung Ju Yung "announced he fired him." The story, though, was
not quite over. Chairman Lee Myung Bak and his personnel
director, Chon Yong Sup, were convicted of unfair labor practices
for having suppressed Suh's union – an offense that sounds quite
serious except that the penalties were laughably low. Chairman
Lee had to pay a fine of five million won or about $7,100 while
Chon was fined two million won or $2,850. Those figures would not
match the cost of a night at one of the posh little hostess clubs
south of the Han River catering to executive "members-only"
Suh looked back proudly on the lessons he believed his
experience had taught some of the top people at Hyundai:
"Management is trying not to have a union, but after this
incident, their attitude changed a lot." Like so many of the
salarymen in the Hyundai group headquarters, he reflected pride
in Hyundai as he reviewed the consequences of the episode. "I
expect many developments in labor policy. They have changed their
views on trade unions since the kidnapping." He admitted having
told his bosses he now had "a terrible feeling against
management" but now said he "will not say anything further
against them." What had turned Suh around? Hyundai at the top
level had apparently decided a show of understanding, maybe
contrition, would keep him from becoming a hero – and spreading
discontent through the ranks.
"Embarrassing," was the word a Hyundai spokesman offered,
maintaining that "managers and workers are all Hyundai family"
and calling the imbroglio "a tragedy." Hyundai papered over the
episode with newspaper advertisements proclaiming the personal
"apology" of Construction President Chung Hoon Mok – but not the
legally "guilty" Chairman M.B. Lee – before the nation. In
philosophical vein, the spokesman said "the existence of unions
will benefit the companies in the long run." The comment, if
sincere, represented a surprising change of heart for a group
with a record of doing all it could to keep unions from forming
or functioning effectively a year after the government had
relaxed its rigid controls on their activities.
"After finding out the facts," Suh believed, "Chung Ju Yung
tried to settle everything" – a decision that meant his personal
ordeal "has been a turning point." While there had not been "a
total shift" in the group attitude toward labor, he conceded, "a
major part has changed." He professed to have sensed some changes
while negotiating with management on a new contract. By the time
the contract was signed, a year and a half after he was
kidnapped, "we got around a 20% increase in wages plus some new
benefits" to satisfy the demands of his white-collar following.
Among them: "some educational fees for workers" and "the right to
be present at board meetings."
Suh tried to leave word with Chung and Lee Myung Bak that he
would "restructure the union" to better serve the interests of
everyone, workers as well as managers. Chung, however, wanted
nothing to do with this troublesome office worker who was causing
him and his people so much embarrassment and loss of face. "I
couldn't meet Chung personally," said Suh, "but I told his
secretary." One dividend from all the publicity, the court cases
and the negotiations: in June 1989 "we got an office for the
labor union" in the Hyundai headquarters building.
In the face of superficial change, the Hyundai view remained
that workers, like managers, owners and their children and heirs,
should be ready and willing to invest a minimum of 50 hours a
week in the job, to work on holidays and to cooperate gladly on
any assignment for the good of the company. Chairman Chung Se
Yung extended this theory by degrees. "When the country is better
off," he told me, "they work 10 hours a day, but when it is
advanced they say eight hours a day with two days a week off."
Korean executives, however, did not think their country was at
either the "better off" or "advanced" level. S.Y. spoke for his
peers at the top of both government and industry when he said,
"We are not at that stage." Hence, he believed a work week of
more than 50 hours with no vacations was still necessary.
Chung Se Yung betrayed an opaque lack of understanding of the
pressures and needs of workers caught in an industrial treadmill
that prevented them from sharing fully in the "economic miracle"
that had so enriched an entire class of Korean society, including
all members of the Chung family. The workers "can take 20 days
off by law, but it is not practiced," said S.Y. At Hyundai "they
get official holidays, and they work those 20 days. They get paid
double." He realized that "management and unions have not
experienced well," as he put it in his somewhat awkward English
acquired during his three years' study in the United States.
Still, he said pleasantly, "my brother is very open, not very
authoritarian" and suggested that the presidents of Hyundai
entities "have more right to talk" to unions than current policy
While the case of the kidnapped clerk might not have changed
underlying attitudes, it did make some executives more aware of
the dangers of flagrant violations of the law in dealing with
office workers in the headquarters. The reality was that Hyundai
still believed in strongarm tactics – and might follow them
whenever, wherever its managers were convinced they had to do so
in order to resist the demands of workers while meeting those of
the owners. Stories like that of Suh were common – though the
censors had kept them out of the papers before the rush to
democratic reform. Beatings and kidnappings of workers had
happened with unnerving frequency in the generation in which the
chaebol had risen to greatness. If Hyundai had learned to
mind its manners in Seoul, the group still reigned supreme in
Ulsan, the city it had helped to build. Industrial sites and
production facilities were the scenes of the major battles
between workers and bosses.
No sooner had prosecutors begun interrogating Suh's kidnappers
in Seoul than more than 3,000 workers struck against two plants
of Hyundai Precision and Industry in Ulsan. The strike got rough
when workers, on May 27, 1988, seized one of the factories while
the company chairman, Chung Mong Ku, Chung Ju Yung's second son
and the most powerful man in the group after the old man, was
still at his desk. Mong Ku was held for five days along with ten
other top bosses before the workers relented under threat of an
attack by policemen outside the compound. Next door at Hyundai
Motor, more than 20,000 workers walked out on May 30 demanding a
48% pay increase. Hyundai turned the walkout into a lockout,
shutting its doors to everyone including those who wanted to
report for work. Chung himself appeared in danger when workers at
HHI hurled dirt at him as a phalanx of his managers hustled him
into an office building. The workers, however, had a strategic
edge – they knew the company needed to feed the American market
while the government fretted over the negative impact of labor
disputes in the run-up to the Olympic Games in September.
Workers began showing up again at both HMC and Precision when
HMC opened its doors after 22 days. The chairman of the Hyundai
Motor union, Lee Yong Bok, virtually apologized for the strike.
"It is regrettable to me to have caused inconvenience and
economic loss in the course of negotiations," he said, promising
"an all-out effort for settlement of the dispute as soon as
possible." The workers, however, were not in the mood for
apologies. The strike lasted another three days before the union
settled for a 28% raise but no pay for the 26 days they were on
strike. "The settlement is not 100% satisfactory," said Lee, "but
I am sure most workers would understand what we have achieved."
Hyundai put the cost of the strike at $490 million in lost sales
of nearly 70,000 cars, 40,000 for export.
The settlement spared company and country much embarrassment
amid the outpouring of national pride surrounding the Olympics.
Radicals, however, walked out of a rally staged by union leaders
– a portent of much worse to come. The strikes of spring 1988,
like the case of Suh Jung Eui, were over, but the story went on.
Both the strikes and the kidnapping epitomized a much larger
conflict between owners and workers. Management still could not
get over the conviction that excising the trouble-makers would
get rid of the cancer. Owners, managers and workers, in the
spirit of patriotism, suppressed their hostility through the
Games before warming up for more confrontations – decisive for
the future of this newly industrialized country.
Copyright © Donald Kirk