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Prolonged Management Vacuum at Kieun Faces Criticism from Korean Confederation of Trade Unions and Union... Attention on Whether Progress Will Be Made Around Lunar New Year

Yoon Jong-won, President of IBK Industrial Bank, was blocked by union members' protest against going to work while commuting to the IBK Industrial Bank headquarters in Jung-gu, Seoul on the 7th. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kwon Haeyoung] The Blue House has begun efforts to appease the IBK Industrial Bank of Korea (IBK) union, which has been protesting for 20 days to block the attendance of Yoon Jong-won, the newly appointed IBK president, shouting "No to parachute appointments." This comes after President Moon Jae-in’s remarks directly hitting the union by stating, "The authority over personnel appointments lies with the Blue House," which the administration actively clarified. Although the IBK union has escalated its struggle by involving the Korean Federation of Trade Unions (KFTU), the prolonged management vacuum is increasing burdens such as damage to small and medium-sized enterprises (SMEs) and unfavorable public opinion. Attention is focused on whether the tangled knot can be untied as the ruling party, government, and Blue House attempt behind-the-scenes dialogue with the union, which needs an exit strategy.

According to the financial sector on the 22nd, the Blue House recently called Kim Hyung-sun, chairman of the IBK union, to actively explain President Moon’s remarks at the New Year’s press conference and conveyed its intention to resolve the situation.

An IBK union official said, "Earlier this week, we received a call from the Blue House explaining that an unexpected question came up during the press conference and that the president’s remarks were made spontaneously," adding, "Not only the Blue House but also the Financial Services Commission and the ruling party expressed regret and conveyed that this situation should be resolved quickly."

Earlier, at a press conference on the 14th, President Moon directly refuted the union’s claims of parachute appointments by saying, "The personnel authority of IBK lies with the government. There is no deficiency in career qualifications, so it is not right to veto someone just because they are not an internal candidate."

Starting with the Blue House, the ruling party, government, and Blue House have shown willingness to resolve the situation behind the scenes, but the IBK union has drawn a line, insisting that the appointment system for the president must be improved first.

However, criticism toward the union, which has maintained a hardline stance amid the longest-ever attendance blockade protest and prolonged management vacuum, is increasing, posing a burden. Although it is true that the tradition of appointing three consecutive internal presidents was broken with Yoon’s inauguration, many evaluations state that the personnel authority lies with the Blue House and that Yoon’s work capabilities are not lacking for performing as IBK president. There is also considerable criticism that the union is "bullying the president."

The biggest problem is that bank management has been paralyzed as President Yoon has been unable to attend work for nearly a month. The terms of three CEOs of affiliates and three bank executives have expired, but follow-up appointments, which should have been made by mid-January, are continuously delayed. Disruptions to financial support for SMEs and small business owners, which IBK plays a crucial role in, are inevitable.

In the financial sector, voices are growing that since the Blue House has provided justification for the union, the union should also end the struggle and actively participate in dialogue. With the Korean Federation of Trade Unions, which held executive elections the day before, joining the struggle, the ruling party, government, and Blue House are likely to take more active measures to resolve the situation.

The IBK union side also said, "We initially insisted on voluntary resignation and appointment withdrawal but have shifted our position to institutional improvement," adding, "We are waiting for a more sincere response," leaving room for compromise.

A financial sector official said, "Normalizing the management of IBK, the financial lifeline for SMEs, is urgent," and predicted, "Since the Blue House has shown willingness to resolve the situation and the IBK union is burdened by worsening public opinion, there is a possibility that the IBK situation will be resolved around the Lunar New Year."