'Dramatic Resolution' Avoids Seoul Subway Strike... Obstacles to 'Financial Crisis Resolution' Remain

"Financial Crisis Reasons, No Restructuring" Specified... Proposal to Request National Subsidy for Free Transportation
Challenges Expected Until Actual National Fund Support Execution... Conflict Sparks Remain

[Asia Economy Reporter Lim Cheol-young] The Seoul subway labor and management reached a dramatic tentative agreement in the final negotiations, avoiding the worst-case strike scenario. The labor and management, who had been at odds over a financial recovery plan involving a 10% reduction in total staff, agreed after more than eight hours of marathon talks to add a clause stating "there will be no forced restructuring" and resumed normal operations. However, since no fundamental solution to the annual financial deficit of about 1 trillion won has been established, tensions are expected to persist.

According to the Seoul Transportation Corporation labor and management on the 14th, the fifth round of wage and collective bargaining negotiations, which began at 3 a.m. the previous day ahead of the planned strike, was tentatively settled around 11:40 a.m. Labor and management agreed in the final talks not to enforce restructuring due to the financial crisis, to form a joint labor-management consultative body, and to jointly propose to the government and Seoul City a plan for national subsidies to cover free transportation. Additionally, working conditions related to the transfer of the Line 7 extension section (Kkachiwool~Bupyeong-gu Office) will be discussed separately, and the agreed wages will be maintained at the same level as last year.

A representative of the Seoul Transportation Corporation labor union explained, "The agreement was reached by adding a clause stating there will be no forced restructuring." Kim Sang-beom, the corporation president, said, "We apologize for causing anxiety among citizens," and added, "Both labor and management agree that national subsidies for public service costs are essential to resolve the financial difficulties, and we will work together to overcome this crisis."

The negotiations, which had stalled and resumed twice, reached a turning point late on the night of the 13th when Sim Sang-jung and Lee Eun-joo, lawmakers from the Land, Infrastructure and Transport Committee and the Public Administration and Security Committee of the Justice Party, intervened as mediators. The two lawmakers explained the national subsidy plan for free transportation being promoted in the National Assembly and urged both sides to adopt a more progressive attitude. With the political sector stepping in, emphasizing that support cannot be provided without self-help measures, the management postponed the restructuring plan, leading to the tentative agreement.

As a result, the planned subway strike was withdrawn. However, since no fundamental solution to the financial crisis was derived, tensions remain. The corporation recorded a deficit of 1.1137 trillion won last year due to the impact of COVID-19 and is expected to record a deficit of about 1.6 trillion won this year as well. However, the government and Seoul Mayor Oh Se-hoon maintain the principle that financial support cannot be provided unless self-help measures to resolve the financial crisis are prepared, so it is widely expected that restructuring plans due to worsening finances could resurface at any time.

Moreover, although lawmakers Sim Sang-jung and Lee Eun-joo have stated they will discuss national subsidy support in the National Assembly, difficulties are anticipated in actual implementation. Even if the Land, Infrastructure and Transport Committee, to which Sim Sang-jung belongs, pushes the agenda, it is unlikely to pass easily if the Ministry of Economy and Finance maintains its current stance.

A Seoul City official said, "The principle of financial support premised on self-help measures is unlikely to change," and explained, "Urgent labor-management agreement and policy support are needed to fundamentally resolve the financial difficulties."

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