Unionized workers and technicians at Korea Zinc have expressed worries about potential job losses and the future of the world's largest zinc smelter, which they have helped build for decades, in the wake of the fight for management control over the firm.
Korea Zinc employees complained they were reaching the limits of tolerable stress because of the “hostile acquisition attempt” by the alliance of the zinc producer’s largest shareholder Young Poong and MBK Partners, which has continued since September last year.
“Korea Zinc is standing at the edge of a cliff, challenged by the hostile takeover attempt and global economic uncertainty,” technicians said in a joint statement released last week.
Korea Zinc workers and the management have been working together toward their shared goal of turning the firm into the world’s largest non-ferrous metal producer, which serves as a backbone of the Korean economy and stands at the heart of the global strategic mineral supply chain, the firm’s labor union said in a statement.
Korea Zinc is the country's sole producer of strategic minerals -- including antimony, indium, tellurium and bismuth -- which are affected by China's export restrictions. The company plays a crucial role in supplying essential materials to domestic industry, including sulfuric acid for semiconductors and nickel.
However, according to the statement, controversies arising from the takeover bid by MBK Partners and Young Poong have overshadowed the hard work of Korea Zinc’s employees.
"The pride we take in having the world’s best technology, in being number one globally after 50 years of operation, and in achieving 100 consecutive quarters of profit has not been adequately acknowledged. Instead, we are enduring the shame of being labeled a 'company in jeopardy' due to the actions of the private equity firm MBK,” they said.
They said they are grappling with anxiety over the potential downsizing of their operations, fearing that their jobs and livelihoods could be at risk.
The labor union also fears they may share the fate of MBK’s other portfolio companies. MBK has been engulfed in a myriad of conflicts with the unionized workers of firms it has acquired.
Citing the examples of retail chain HomePlus, fried chicken brand BHC and outdoor apparel brand Nepa, the union said several firms had shown lackluster performance after MBK’s takeover only to boomerang on the employees. “There’s no guarantee that such things won't happen to Korea Zinc.”
Unionized workers urged the MBK-Young Poong alliance to participate in dialogue and stop tarnishing the reputation of Korea Zinc and its workers.
“We clearly state that if (MBK and Young Poong) don’t put the brakes on their hostile takeover ambitions, the Korea Zinc labor union will do everything it can to block the attempt.”
Following a series of attempts to gain controlling stakes in Korea Zinc through tender offers and legal fights, the management dispute is set to reach a critical juncture next month.
The Seoul Central District Court is expected to make a ruling by March 7 on Young Poong’s injunction filed to suspend the effectiveness of the resolution passed in Korea Zinc’s extraordinary shareholders' meeting held in January. Korea Zinc Chairman Choi Yun-beom limited the MBK alliance’s voting rights at the meeting through a cross-shareholding structure.
If the court rules in favor of MBK, another vote will take place at Korea Zinc’s general shareholders meeting in March. The Korea Zinc chairman will cement his victory if the injunction is dismissed.
The Young Poong-MBK coalition has secured 46.7 percent of voting shares in Korea Zinc, outstripping the 39 percent stake held by Choi's side.
hnpark@heraldcorp.com
