Thousands of South Korean railworkers have ended their strike after three weeks of intense struggle against the right-wing President – but the fight is far from over writes Clive Tillman

On December 31 2013 thousands of railway workers returned to work after a three week long strike against government plans to set up a subsidiary company to operate a KTX bullet train service in competition with the state run carrier Korail. The 22 day strike was the longest railway strike in South Korean history. Throughout the world workers held solidarity actions in support of the workers.

Korail management and the right wing administration of Park Geun-Hye cracked down on the strike with full force – arrest warrants were issued against the Korean Railway Workers Union (KRWU) leaders and almost 8,000 workers had their positions suspended or terminated for their involvement in the strike.

On December 17 police raided KRWU headquarters and confiscated computers and documents. State repression culminated on December 22 as 6,000 riot police violently raided the KTCU headquarters in Seoul without a search warrant.

The siege lasted for over 12 hours with police violently smashing their way through the building with tear gas, water cannons and oxygen removal machines. Over 130 people were arrested. Despite smashing through the entire building, the police were unable to locate the wanted KRWU officials.

The strike ended on 31 December after negotiations between the KRWU and the government led to the agreement to set up a parliamentary committee to discuss the issues that led to the strike, including the possibility of privatisation. Although the strike has ended the fight is far from over.

The leaders of the KRWU are presently in police custody and awaiting sentence and the government refuses to drop its plans to set up a subsidiary KTX operator. Korail management also refuses to drop disciplinary action against workers and the company is pursuing a law suit against the union for over $4.6 million in damages.

Thousands of workers have been summoned by management appear before disciplinary hearings and undergo brainwashing through “education” programs.

Privatisation

The government claims that privatisation is not on the cards, however this claim is very difficult to believe. Although it is true that 41% of the shares of the new subsidiary company will (at least initially) be owned by Korail with the remaining shares to be owned directly by the government, the situation is far more complex.

The government knows that outright privatisation is unpopular, therefore it is instead cutting off a large chunk of Korail’s revenue in order to put the state owned rail operator to the sword. The high speed KTX line between Suseo Gangnam and Pyeongtaek is the busiest and most profitable line because it runs through the country’s most wealthy business districts. This line alone makes up a major part of Korail’s revenue. Because only 41% of the shares in the new subsidiary will be owned by Korail, the new subsidiary operation will essentially reduce Korail’s revenue from the profitable Suseo line. This has been affirmed by documents released by Korail senior management itself on December 10 which estimates that the new operator will reduce Korail’s revenue by approximately $500 million per year.

With Korail’s main revenue earner depleted the government can allow Korail to snowball further into debt and use this as a justification for selling the KTX line off at dirt cheap prices to their cronies in the private sector.

There is also very little doubt that the shares for the new subsidiary company will be sold off to the private sector. Already a document has been leaked to the Korean newspapers outlining key plans to sell off shares to private bidders. It is easy to see why the private sector has its eyes on the KTX line. The route is guaranteed to rake in profits of up to 20% without having to bear any of the risks associated with investing capital in construction. As KRWU chairman Lee Young-ik comments: “The Suseo-Pyongtaek line is a goose that will always lay golden eggs. Why see a goose to the private sector which never took part in feeding it?”

The Park administration’s privatisation plan is nothing short of legalised theft. It intends to hand over the nation’s most lucrative railway line (built with billions in taxpayer money) to the hands of private bidders for a fraction of its construction costs. For rural and less populous lines the loss of KTX revenue will mean service degradation and/or higher costs for taxpayers for the maintenance.

The government claims that “reform” is needed in order to make the rail system more “efficient”. It is blaming the unions for demanding “unreasonable” wages. To support the government Korean right wing newspapers are running bogus stories of the average Korail employee earning over $60,000 per year. Such claims are misleading. For a start, this “average wage” includes all persons employed by the company, including “class 1 and 2 employees” who form part of middle/senior management.

Those involved in the strike are from the lower end of the pay scale and it has been reported that some employees such as ticketing agents are earning as little as $28,000 per year even after over 15 years of service. Furthermore, the union has already made a lot of concessions to management. Since 2005 over 10% of Korail’s workforce has been cut back by large scale redundancies and average real wage have fallen.

Debt crisis

Behind government rhetoric and blame games is the dark reality of Korail’s debt crisis. A large bulk of Korail’s debts occurred due to management’s decision to invest in a failed real estate mega project with the private sector called the Yongsan International Business Zone. The Yongsan development project was a $31 billion mega project involving Korail and some of South Korea largest corporate conglomerates known as the Chaebol. The plan was to develop a Dubai inspired luxury business hub for the rich and powerful, with the promise of reviving South Korea’s economic glory days of the 70s and 80s.

Despite the over ambitious plans, the global economic crisis of 2008 hit the project hard. In 2013 Korea’s real estate bubble busted and the entire project had to be abandoned.

The Yongsan development project was the epitome of corporate greed: Thousands of working class people were forcibly removed and had their homes demolished for the project, five people were even killed by a violent scuffle between homeowners and police. Korail management gambled billions in public money on a real estate venture for the benefit of the rich and powerful, however once the project failed workers and the public have to bear the brunt of management’s mistakes.

A lot is at stake in this struggle. The fight is far from over and a general strike has been called for February 25. If the government gets its way it will also lead to further job cuts and an all out smashing of the KRWU. The KRWU is a proud union with a proud heritage of struggle.

Militant struggle through the KRWU has won major gains in pay and conditions for railway workers, by smashing the KRWU the government can lower wage standards across the board for workers in Korea and the entire Asia Pacific region.