"Moon's Remarks Misunderstood"... Ruling Party, Government, and Blue House Move to Resolve Industrial Bank Crisis (Comprehensive)

Ruling Party, Government, and Blue House Express Willingness to Resolve Crisis in Phone Call with Gi-eun Union Chair
Prolonged Management Vacuum at Gi-eun Draws Korean Financial Union and Korean Confederation of Trade Unions... Unions Also Face Public Criticism Pressure
Attention on Whether Progress in Crisis Resolution Will Be Seen Around Lunar New Year

On the 7th, union members are protesting to block Yoon Jong-won, President of IBK Industrial Bank, from entering the headquarters in Jung-gu, Seoul. 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 IBK President Yoon Jong-won, shouting "No to parachute appointments." This comes after President Moon Jae-in delivered a direct blow to the union by stating, "The authority over personnel appointments lies with the Blue House," and the administration actively clarified his remarks. Although the IBK union has escalated its struggle by involving the Federation of Korean Trade Unions (FKTU), the prolonged management vacuum is causing increasing burdens due to 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 financial circles 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 a willingness 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 arose 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 claim of parachute appointments, stating, "The personnel authority of IBK lies with the government. There is no deficiency in career qualifications, so vetoing someone just because they are not an internal candidate is not right."

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

However, criticism toward the union, which has maintained a hardline stance amid the longest-ever work attendance blockade and prolonged management vacuum, is increasing and becoming a burden. While it is true that the tradition of appointing three consecutive internal presidents was broken with Yoon’s inauguration, many evaluations hold that the personnel authority lies with the Blue House and that President Yoon’s work capabilities are sufficient to perform as IBK president. There is also considerable criticism that the union is "bullying the president."

The biggest problem is that the bank’s 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, have been continuously delayed. Disruptions to financial support for SMEs and small business owners, for whom IBK serves as a financial lifeline, are inevitable.

Within financial circles, voices are growing that the Blue House has provided justification for the IBK union, which needs an "exit strategy," and that the union should therefore end its struggle and actively participate in dialogue. There is also a view that the union is flaunting its political power by involving the Financial Union and the FKTU in the struggle. Especially, the Financial Union and FKTU, which recently held executive elections, have joined the effort to block President Yoon’s attendance, exacerbating the situation.

The ruling party, government, and Blue House are also likely to take more active measures to quickly resolve the situation, especially as the FKTU, which held executive elections the day before, has joined the struggle. Although there is criticism that the ruling party, government, and Blue House are being led by the union ahead of the April general elections due to electoral concerns, it is pointed out that the Blue House holds the key to resolving the situation since the IBK union’s struggle has some justification.

The IBK union side also stated, "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 the possibility of compromise open.

A financial official said, "The normalization of IBK’s management, which is a financial lifeline for SMEs, is urgent," and predicted, "Since the Blue House has shown willingness to resolve the situation and the IBK union is under pressure from worsening public opinion, there is a possibility that the IBK situation will be resolved around the Lunar New Year."