Chungnam Supports Local Intercity Bus Industry for 'Employment Retention'... Preventing Large-Scale Layoffs

[Asia Economy (Hongseong) Reporter Jeong Il-woong] Chungnam Province plans to support the retention of employment for furloughed drivers in the local intercity bus industry (hereinafter referred to as the bus industry) to prevent a large-scale layoff crisis. Previously, the bus industry had announced layoffs of employees, citing management difficulties due to the prolonged COVID-19 pandemic.

On the 9th, the province announced that it intends to provide 1.05 billion KRW in support funds to the bus industry under the name of maintaining employment for furloughed drivers.

The support targets are 523 furloughed drivers belonging to five intercity bus companies in Chungnam: Geumnam, Chungnam, Hanyang, Jungbu, and Samheung Express. The support period is expected to be maintained from November 16, when the government’s employment retention support payment expires, until December 31.

Earlier, the Chungnam Bus Transportation Business Association (with participation from the five intercity bus companies) announced layoffs of employees in August. The core plan was to negotiate with the labor union regarding the scale and procedures of layoffs due to management difficulties caused by COVID-19 and then implement them.

The main basis for the layoffs is the deterioration of management due to the prolonged COVID-19 pandemic. The logic is that the decrease in passengers has led to a reduction in operating buses and transportation revenue, exceeding the range that the bus industry can endure on its own.

In fact, it has been confirmed that the local intercity bus industry recently suspended operation of 380 out of a total of 806 buses (47.1%). Additionally, due to the reduction in bus operations, transportation revenue from January to September decreased by approximately 71.2 billion KRW (47.9%) compared to the previous year, and transportation losses caused by this are estimated to reach 11 billion KRW.

However, when the association actually brought up the layoff card for employees, some criticized it as an attempt to pressure the government by holding employees hostage. This view stems from the perception that negotiations were intended to start before the government’s employment retention support payment expired and from the increased resentment after layoff talks emerged just about a month after a wage freeze and employment retention agreement was signed between the association and the labor union.

The problem is that, setting aside these sentiments, if the government’s employment retention support expires as the bus industry claims, the management difficulties that the transportation industry must endure will inevitably worsen, and it will be difficult to avoid the crisis of large-scale layoffs and strikes (labor-management conflicts). Since March, the bus industry has been paying the salaries of furloughed transportation workers with the government’s employment retention support funds.

Accordingly, the province recognizes the COVID-19 situation as a national disaster and plans to provide employment retention support funds applying the government’s employment retention support rate (67%) at the provincial level to resolve the bus industry’s management difficulties and guarantee the livelihood of transportation workers. This can also be interpreted as a desperate measure to prevent large-scale layoffs within the local bus industry.

A provincial official said, “The payment of employment retention support funds is a temporary support measure to resolve the management difficulties of the local bus industry and prevent a large-scale layoff crisis among transportation workers,” adding, “The province will continue to strive to prepare policies to secure the public nature of public transportation.”

This content was produced with the assistance of AI translation services.