Labor Agreement Reached at Homeplus... Union Intensifies Offensive "MBK is Euthanasia"

Agreement Includes 'Labor-Management Consensus on Store Sales'
Equal Labor-Management Representation Required in Restructuring and Asset Sales Discussions
Continued Criticism Toward Major Shareholder
"Spent Little of Their Own Money, Shifted Debt and Interest Responsibility"

Homeplus labor and management have reached a wage agreement for this year amid corporate rehabilitation proceedings. However, the labor union plans to check the owner, private equity fund (PEF) MBK Partners, by asserting its responsibility, preventing reckless restructuring or asset sales during the future rehabilitation plan, which is expected to cause conflict.

Members of the Mart Industry Union of the Korean Confederation of Trade Unions Service Federation and the Homeplus Branch held a press conference on the 6th in front of the D Tower in Gwanghwamun, Seoul, where MBK Partners, the major shareholder of Homeplus, has its office. Photo by Yonhap News

The Homeplus Mart Industry Union signed this year's wage agreement with management on the 13th. According to the tentative agreement reached on the 24th of last month, the final deal included ▲an average wage increase of 1.2% ▲establishment of on-site experience allowance (basic 2,500 KRW plus an additional 2,500 KRW annually) ▲improvement of title change criteria ▲formation of a consultative body in case of store sales.

The Mart Union emphasized the significance of enforcing the demand that 'a labor-management council must be convened when stores are sold.' This is because the labor union's position is becoming an important variable in the corporate rehabilitation process. According to the negotiations, when the company is split or all or part of its business is transferred, after the preferred negotiator is confirmed, a consultative body consisting of three labor and three management representatives will be formed to discuss and conclude an employment stability agreement. The union expects this to be a crucial turning point in minimizing workers' sacrifices during Homeplus's restructuring process.

An Sooyong, chairman of the Homeplus Mart Union, said, "The sudden corporate rehabilitation filing reflects a disrespectful attitude toward workers," adding, "We will do our best to prevent employees' sacrifices during the rehabilitation process." Chairman An also held a meeting with the Euljiro Committee that morning, demanding that the rehabilitation plan be designed without employee layoffs or asset sales.

A Homeplus store in downtown Seoul. Photo by Yonhap News

Meanwhile, the union intensified its offensive, claiming that MBK judged Homeplus's profit generation to be over and is trying to euthanize Homeplus by borrowing the hands of 'others (the court and creditors).' The Homeplus branch of the Korean Confederation of Trade Unions Mart Industry Union pointed out in the report titled "Speculative Capital MBK's Homeplus Eat-and-Run Sale Season 3," published the day before, that MBK raised 3.2 trillion KRW through its 3rd blind fund when acquiring Homeplus in 2015, then acquired or invested in several companies and sold them to make trillions in profits.

Notably, MBK acquired or invested in domestic companies such as ING Life (Orange Life), NEPA, Doosan Machine Tools, Chinese companies (HKBN, Apex Logistics), and Japanese companies (Tasaki, Accordia Golf). Among these, Accordia Golf was bought for 1 trillion KRW and sold for 4 trillion KRW, making a 3 trillion KRW profit. Doosan Machine Tools also earned 1.3 trillion KRW in profits through the same method. The union claims that once only Homeplus and NEPA are liquidated, astronomical bonuses are promised.

The union stated, "The main strategy of private equity funds is to maximize capital gains through restructuring, and the acquired companies are merely targets for cash or asset plundering," adding, "MBK acquired Homeplus by spending little of its own money, making Homeplus borrow money using its assets as collateral, thereby bearing the debt and interest responsibilities." They raised their voice, saying, "The cause of Homeplus's management crisis is not the saturation of the mart industry but the structural problems of Homeplus that prevent operating and net profits. The responsibility lies with MBK, which shifted the interest on the borrowed costs at the time of acquisition onto Homeplus."