Union Opposition Joins Political Sphere... The Complexly Entangled Citi Bank Withdrawal Battle (Comprehensive)

Yoomyungsoon Bank President "No Consideration of Asset Sale Without Employment Succession"
CEO Message to Employees Hints at Possibility of 'Voluntary Retirement'
Union Opposition Intensifies, Raising Risk of Large-Scale Strike
Ruling Party Lawmakers Visit Citibank...Will Political Sphere Also Speak Out?

Korea Citibank announced its withdrawal from the domestic consumer finance sector. The photo shows the Korea Citibank headquarters in Jongno-gu, Seoul, on the 19th. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Song Seung-seop] The calculations of stakeholders surrounding Korea Citibank's withdrawal from retail banking are becoming increasingly complex. The clear differences in views between labor and management make it difficult to find common ground in negotiations, and recently, voices have even started to emerge from the political sphere. There are forecasts that if the Citibank withdrawal issue becomes more tangled, the situation could be prolonged.

According to the financial industry on the 16th, President Yoo recently told employees, "In pursuing an exit strategy, I once again emphasize that customer protection and the protection of employees' interests should be the top priority." This is interpreted as a message issued again following early this month amid growing anxiety about job security among internal staff, including the labor union. President Yoo's position is that "so far, asset sale methods without employment succession have not been considered."

Yoom Young-soon, President of Citibank Korea

President Yoo must successfully carry out domestic retail banking in line with Citigroup's global strategy changes, but the issue of employment succession and the resulting labor union opposition are obstacles. The labor union strongly opposes partial sales and asset sales as well. If an agreement with the union cannot be reached, internal resistance and large-scale strikes are inevitable. If the damage caused by strikes grows, it will be difficult for President Yoo to avoid responsibility.

However, it is difficult to fully meet the employment conditions of the approximately 2,500 employees. Citibank has a typical jar-shaped structure with many employees having long tenure and high salaries. The acquiring company would have to bear considerable costs, which could reduce the attractiveness of the acquisition. It is reported that most companies interested in acquiring Citibank's consumer finance division are also negative about employment succession. President Yoo also told employees, "Some potential buyers have expressed concerns about the challenging business environment of traditional consumer finance, our workforce structure, and excessive labor cost burdens."

The messages from President Yoo and the board of directors vary moment by moment depending on the situation. At a meeting with field employees last month, President Yoo clearly stated the withdrawal principle of "prioritizing a full sale." However, after going through the board, if the situation is unfavorable, the direction shifted to considering not partial sales but "gradual abolition." The liquidation scenario is a policy that causes significant employment instability for many employees and is strongly opposed by the labor union.

Accordingly, on the 10th, President Yoo pulled out the voluntary retirement card through a 'CEO message.' He mentioned, "We will do our best not to lose employees through transfers, voluntary retirements related to the sale, and internal redeployment." Citibank's last voluntary retirement was carried out seven years ago. From the management's perspective, this could partially resolve the biggest hurdles of labor costs and union opposition and positively affect the sale.

Labor Union Secures Right to Strike, Political Sphere Raises Voices

On the 8th, the Financial Union Korea Citibank Branch held a "Rally for Victory in Collective Wage Struggle and Fight to Protect the Right to Livelihood" at the Korea Citibank headquarters in Jung-gu, Seoul. Photo by Korea Citibank Labor Union

The situation is equally complicated for the labor union, which is shouting for a desperate fight. The union has held rallies in front of the head office to defend their right to survival and started overnight sit-ins in front of the bank president's office, gradually escalating the level of struggle. On the 11th, they passed a strike vote with a 99% approval rate, securing a legal right to strike. After completing a four-week nationwide tour by the 18th, they plan to launch full-scale struggles starting in July.

However, large-scale strikes are a cautious measure for the union as they cause significant consumer damage. Among the approximately 3,300 regular employees of Citibank, about 80% are union members. If strikes cause existing customers to experience disruptions in using Citibank, there is a risk of backlash. A union official said, "It is difficult to disclose detailed schedules such as internal struggle guidelines," but added, "Even if we struggle, we will prepare to ensure no harm comes to customers."

If partial sales occur during the business division sale process, the issue becomes more complicated. The industry expects sales by business units, such as asset management or card divisions. If employment succession is only applied to some employees due to partial sales, the union could be divided between employees with stable employment and those without. This could weaken the momentum for future struggles.

Members of the Democratic Party of Korea and labor union officials are taking a commemorative photo in front of the main gate of Citibank Korea. Photo by Citibank Korea Labor Union.

The political sphere has also begun to join the Citibank issue. The day before, six lawmakers from the Democratic Party visited Citibank in person. Members of the National Assembly's Environment and Labor Committee?Ahn Ho-young, Roh Woong-rae, Jang Cheol-min?and members of the Political Affairs Committee?Kim Byung-wook, Min Byung-duk, Lee Yong-woo?held a meeting with the labor union and met with the bank president, then disclosed related details. Representative Ahn explained, "I requested President Yoo to proceed through sufficient consultation with the labor union, and I received a positive response indicating that this would be done."

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