Nearly 1/2 of the nearly 6000 SC First Bank workers are on strike purportedly for the introduction of a “merit-based” pay scheme. The plan was proposed and implemented by the foreign management of the bank, possibly, as a tool to lower labor costs. SC First Bank has struggled with labor costs over the past decade and because of the costs has one of the lowest returns on equity in the Korean market.
Moody’s downgraded the bank from “stable” to “negative” based, primarily, on liquidity concerns caused by a rush on the bank by customers worried about the continued viability of the bank and the potential for more branch closings. The Korean government has ordered the bank to increase its cash reserves.
Korea, according to the International Labor Foundation statistics, had over 800,000 hours in lost work hours because of strikes in 2008. This is double Australia’s and over forty times Thailand’s days lost to strikes. China and Japan have only docked a small fraction of the days Korea has lost in strikes. The only major country even to come close to the numbers of hours lost in work in Asia is the notorious India.
It seems that strikes, often, have more to do with anti-foreign sentiment and aggressive labor union management that aggravate this sentiment in order to advance personal political objectives and futures. Many noted present politicians have worked their way up from the unions to become leading political figures. A “good strike,” often, brings these union leaders into the spotlight.
Standard Chartered bought Korea First Bank in 2005 of USD 3.3 billion.