Daewoo Chief Begs a Thousand Pardons
Following Massive Layoffs at Auto Maker
By Hae Won Choi
The Wall Street Journal
June 26, 2001INCHON, South Korea -- On a recent Tuesday afternoon, Lee Jong Dae, the chairman of insolvent Daewoo Motor Co., performed a job-outplacement technique that you won't find in management textbooks.
Attired in a dark blue suit, the executive fell to his knees before a factory worker whom Mr. Lee had dismissed a few months ago in a restructuring. Mr. Lee bowed, his forehead nearly touching the grimy floor of a sports stadium where he was sponsoring a job fair for fired workers.
"My deepest apologies to you and your family for laying you off. I am determined to find you a job," Mr. Lee said to the astonished man. "Please forgive me."
Mr. Lee, 60 years old, is on a one-man campaign without precedent in Korea to find work for 7,000 employees he fired in a last-ditch effort to keep his company afloat. Still reeling from the 1997-1998 economic crisis caused by heavily indebted conglomerates and the weakness of the nation's currency, firms are struggling to cut costs, and the government is inching ahead with a broad effort to rebuild the economy. But the restructuring imperative is butting heads with Korea's traditional Confucian business culture, which advocates the view that workers be treated like family. Indeed, Daewoo's abandoned workers feel orphaned, and Mr. Lee believes that restoring labor harmony is central to the company's survival strategy, which includes an attempt to find a white knight.
The apologetic executive is also crucial to a plan by General Motors Corp. to buy its way into Korea's closed car market. GM, the world's No. 1 car maker, on June 4 began formal negotiations to purchase Daewoo from its Korean creditors, which put Daewoo under court protection last November. If GM wins Daewoo but Mr. Lee fails to mollify the laid-off workers, GM could face labor protests that would hamper its efforts to revive the company.
"I'm the father of my employees," Mr. Lee says. "I need to bring back hope to everyone."
Going to Extremes
He has gone to extremes of self-abasement to do that, begging lawmakers to purchase Daewoo cars and imploring thousands of Korean companies to take on fired Daewoo workers. Twice a month, he stands on train platforms during rush hour wearing a red sash that reads, "Help Save Daewoo Motor," and passes out fliers to commuters imploring them to hire an ex-employee or to buy a car.
Mr. Lee, appointed by the courts as a caretaker of Daewoo Motor last November after the bankruptcy filing, has an additional public-relations headache Kim Woo Choong, his 64-year-old predecessor, who is on the run from Korean authorities. Seoul prosecutors allege that Mr. Kim masterminded Asia's largest-ever case of fraud -- falsifying the financial statements of 12 companies, including Daewoo Motor, that he presided over as the head of the Daewoo Group conglomerate. Mr. Kim, the founder of Daewoo Group, once was revered as the man who built a small textile-trading company into the country's second-largest conglomerate. In August 1999, however, the government decided to cut off bank lending to members of the Daewoo Group after it was disclosed that Daewoo had amassed more than $68.4 billion in liabilities.
Furious at Mr. Kim's alleged betrayal, Daewoo Motor employees sent a posse of six strong-legged union members to France, where the ex-chairman was rumored to be in hiding. The unionists toured the country on their bicycles but failed to locate him. Mr. Kim wasn't reachable for comment. Seok Jin Kang, his lawyer, declined to comment.
Begging for Time
Mr. Lee, who previously was a court-appointed manager at Kia Motors Corp., another Korean auto maker that was in bankruptcy reorganization, at first tried to avoid layoffs by begging for time from banks that Daewoo owed money. The bankers rejected his requests and threatened to cut off funds. With business in a tailspin -- Daewoo is producing barely half the two million cars it had been turning out -- he made what he says was the most painful decision of his life and fired about a third of the work force in December. "My heart ripped apart when I realized I had no choice," says Mr. Lee. In April, the labor union rioted, with workers throwing stones and Molotov cocktails at police outside Daewoo's main plant near this industrial city. The outburst left more than 100 people injured.
A guilt-ridden Mr. Lee says he often found solace in drinking soju, a popular Korean hard liquor, with his friends until dawn. At home, he would play his favorite Korean folk tunes on his accordion to "forget about everything." But after two months of agonizing, he decided to make amends.
In March, he sent letters to 26,000 companies pleading that they employ one former worker each. In the letter, Mr. Lee wrote "Many of my former employees are living in
despair. I urge you to share the pain of your unemployed brethren."
His crusade has taken him to more than 130 companies to plead with managers to help his flock. On a sultry Saturday morning, he went to one of Daewoo Motor's parts suppliers and made his pitch to Chi Young Jin, the manager. "This is a very difficult request," said Mr. Lee, his hands clasped on his lap and his head bowed. He then handed a list of his former employees to Mr. Chi. "I can vouch that each person on this list is very talented and hard-working," he said.
Tough for Everyone
Mr. Chi promised to consider his request, but added "It's a tough time for everyone these days." Mr. Lee left empty-handed.
Parliament is another prime target. One Monday afternoon, Mr. Lee walked the silent corridors of the National Assembly to ask lawmakers for support. Upon entering one legislator's office, he bowed deeply and said "One Daewoo Motor car sold can give hope to my employees." The lawmaker, Suh Sang Suhp, instantly agreed to become an "Honorary Daewoo Salesman," a program in which politicians pledge to sell Daewoos to their friends and relatives.
"One of my friends is planning to buy a new car. I will make sure he buys a Daewoo," Mr. Suh says. Seventeen lawmakers have volunteered for the Honorary Salesman program.
So far, Mr. Lee's efforts have borne a bit of fruit. He says 601 former employees have found work at other companies. The Honorary Daewoo Salesmen at the National Assembly may need some sales training, however, since they have sold just 74 cars in three months.
Daewoo's militant labor union seems to appreciate the effort. Choi Jong Hak, spokesman for the union, says members resent Mr. Lee's decision to slash jobs but commend him for not "running away" as Mr. Kim did. "At least he's trying to do something about the pain he caused to innocent workers," Mr. Choi says.
A General Motors official, noting that negotiations to purchase Daewoo are under way, declined to say what he thought of Mr. Lee's efforts. But the kowtowing appears to be yielding some emotional dividends.
As Mr. Lee bowed his head to the ground that Tuesday afternoon at the job fair he organized, the worker, Choo Chae Young, quickly grabbed him by the arms and tried to pull him up.
"You're not to blame," said Mr. Choo, who worked on assembly lines for 31 years before losing his job. "I thank you for bringing back hope into our lives."
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