Purmil's Dramatic Recovery... Sale Possibility Still at 'Zero Hour'

Notice of Voluntary Retirement for Employees with Over 3 Years of Service in 5 Days
Attendance of Over 50 Branch Owners from Across the Country at the Rally

On the 26th, the Purmil labor union held a rally in front of the company's headquarters in Yeongdeungpo-gu, Seoul, protesting the company's unilateral business closure and dismissal notice. The photo shows the Purmil headquarters on that day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Song Seung-yoon] The tug-of-war between labor and management continues over the potential resale of the dairy company Purmil, which has been embroiled in controversy due to business closure and layoff notices. Both sides have tentatively agreed to a 30% workforce reduction plan, and procedures for this have also begun. However, it remains unclear whether the management will continue operations while pursuing a sale, and opposition from stakeholders involved does not seem to subside easily.

According to industry sources on the 10th, the Purmil labor union announced on the previous day that it will accept voluntary retirement applications from employees with more than three years of service for five days, from the 10th to the 14th. Employees with up to 10 years of service will receive an average of five months' salary, those with 25 years of service will receive six months' salary, and those with more than 25 years will receive seven months' salary. Statutory severance pay and unused annual leave allowances are separately determined. The voluntary retirement date is set as the originally announced business closure date of this month’s 30th, and if the number of applicants falls short of 30%, recommended dismissal will be implemented. It was also stated that those subject to recommended dismissal will be paid a lump sum of four months' salary.

The union’s announcement of voluntary retirement is interpreted as the management accepting the union’s proposal for a 30% restructuring condition tied to the company’s sale during previous labor-management negotiations. During the fourth negotiation held on the 8th at the Jeonju plant, Purmil’s working-level staff and the union continued discussions on this plan. The working-level staff who participated in the negotiation decided to report this to the management. Since the restructuring procedures have actually begun, Purmil is expected to announce its position on this matter as early as within two weeks.

Union members of Purmil, opposing the business closure and layoff notice, held a rally on the 26th in front of the headquarters in Yeongdeungpo-gu, Seoul, urging the immediate withdrawal of the unilateral business closure and layoff notice and calling for the resumption of the sale process. Photo by Hyunmin Kim kimhyun81@

Throughout previous negotiations, Purmil’s labor and management have struggled to narrow their differences, resulting in ongoing conflict. The conflict intensified when it became known that Purmil had announced it would accept voluntary retirement applications during negotiations and subsequently notified dealers and directly affiliated dairy farmers that the business would close as scheduled.

As a result, the possibility that Purmil will somehow continue its operations has increased, but both continuing the business and completing the sale remain challenging, leaving the affected stakeholders’ anxieties unresolved. In this regard, the National Purmil Dealers Emergency Response Committee, recently formed by Purmil dealers, held its first rally in front of Purmil’s headquarters in Yeongdeungpo-gu, Seoul, the day before. About 50 dealers from across the country attended the rally.

They held signs and banners with slogans such as “Dealers will all perish. Guarantee our right to survive,” and “Abuse of power ignoring dealers. Compensate for damages,” urging, “Purmil must comply with the supply obligations specified in the sales agreement and compensate dealers for damages caused by the business closure.” On the 25th of last month, a rally demanding the survival rights of dairy farmers was held, and the very next day, on the 26th, the Purmil union held a rally protesting the company’s business closure and layoff notices.

Earlier, Purmil decided to close its business on the 30th of this month, citing an inability to endure years of continuous losses. On the 17th of last month, Purmil sent emails notifying all 400 employees of the business closure and layoffs.

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