Class Warfare

The treacherous employment conditions of the past six months have produced labor relations as contentious as any since the British “Winter of Discontent” in 1978-79.  British workers staged a sit-in at the Vesta wind turbine factory, 300 Korean policemen were required to evict workers from the Ssongyang Motor Co. paint shop after a 77-day sit-in.  French workers at a 3M plant kidnapped and held CEO Luc Rousselet hostage for two days to protest the company’s lay-off plan.  In Tongua City, home of the Jianlong Steel Company, workers beat the general manager to death.  On August 16, the Chinese government called off the planned take-over of Linzhou Iron & Steel by Fengbao Iron & Steel in response to workers’ protests.

Some countries, such as South Korean and France have a particularly strong continuing tradition of labor unrest, strikes and sit-ins, but if high unemployment, as some economists have suggested, persists through the onset of the recovery in a variety of countries, the tension between returning corporate profits and furloughed workers will produce significant frustrations that could spill over into reputation risk.

Whether or not a company has a good rapport with its unionized or non-unionized workforce, now is the time to revisit labor relations strategies, consult with labor representatives and work on a joint plan to manage the return to growth.  The demographic context in the developed countries is still shaped by a secular labor shortage.  Reigniting class warfare could make hostages not just of a company’s senior executives, but of its long term competitiveness.

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