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Govt to go ahead

with sale Daewoo

motors, warns strikers

SEOUL: South Korea on Sunday issued a tough warning to striking auto workers and vowed to push ahead with the sale of Daewoo Motor Co. to a foreign buyer despite fierce opposition ahead of Thursday's elections.

"We will take stern actions against illegal strikes by auto unions over Daewoo Motor's auction," Finance and Economy Minister Lee Hun-Jai and ten others cabinet members said in a joint statement.

They urged unions to stop the strike, now in its fourth day, saying it could have huge repercussions for the economy as a whole ahead of the elections on Thursday.

They said, Daewoo Motor's sale was "a very important issue that could sway our auto industry and economy."

"The country's reforms and economic recovery are endangered by a flurry of illegal group actions pursuing group interests in the lead up to elections. We will sternly deal with such illegal actions."

The strike, which began on Thursday at all South Korean auto firms including Hyundai Motor Co., will last until on Wednesday.

Prosecutors on Saturday launched a man hunt for 15 unionists from Daewoo Motor facing charges of using violence during rallies last week, leading illegal strikes more than 20 times since February 15, and causing some 50 billion won in losses (45 million dollars) to the company.

Government officials cautioned that labour turmoil, if unchecked, could spark a fresh economic crisis. The auto industry is at the centre of the country's crucial export trade.

But unions have refused to back down, demanding an immediate suspension of the government's restructuring programme and a halt to the sale of auto firms to foreign companies.

They have suggested Daewoo Motor should be nationalised or run by a domestic firm.

Recent survey showed a majority of South Koreans favouring the sale of Daewoo motors to a domestic firm, or at the very least a local-foreign consortium.

Many South Koreans view the auto industry as one of the symbols of national economic pride.

Daewoo Motor, once the nation's second biggest automaker with an annual production capacity of about two million units, was lumbered with about 8.6 trillion won (16.4 billion dollars) in debt when its parent group collapsed last year.

US auto giants Ford and General Motors Corp. (GM), Italy's Fiat and Germany's DaimlerChrysler Ñ and Hyundai Ñ have applied to take over Daewoo Motor.

Ford and GM are tipped as front-runners in the race to acquire Daewoo as they desperately seek a production base in the booming Asian market and access to South Korea's notoriously inaccessible auto market.

The strike marked the start of the country's annual strike season, leaving the government to negotiate a perilous course between unions, the voting public and foreign investors nervous over the future of Seoul's reforms.

Auto unionists have threatened to lead demonstrations in Seoul, Pusan, Inchon and Ulsan as the election draws near.

Last week, medical doctors angry at medicine dispensing rules staged a three-day strike that threw the nation's health system into turmoil, with 75 percent of 19,300 clinics shut to patients.

The Korea Corporate Medical Insurance Service has threatened to begin a strike from Monday in protest at plans to integrate state insurance businesses.ÑAFP