Unions warn of more Daewoo protests

More than 70 workers were arrested after Monday's violent protests.

SEOUL, South Korea -- One of South Korea's largest union groups has vowed to escalate the battle between ailing car maker Daewoo and hundreds of its former workers.

The Korean Confederation of Trade Unions, an umbrella organization representing 650,000 members, said it would protest government moves to break up strike action taken by workers at Daewoo's main Pupyong plant.

The plant was the scene of violent scuffles between protestors and riot police Monday, triggered when thousands of riot police used forklifts to break down the front gate and end a four-day sit-in protest by 600 laid-off workers.

The workers threw rocks and wielded iron bars and firebombs at the police before running back inside the massive plant, which is 18 miles (30 kilometers) from the center of Seoul.

More than 70 arrested

Police later rounded up many of the protestors, arresting more than 70.

"We plan to hold outdoor rallies every day to protest the government's action," says Sohn Nak-koo, a spokesman for the Korean Federation of Unions.

Sohn said about 1000 workers planned to rally near the train station in Pupyong on Tuesday, and once a day for the rest of the week.

A spokesman for Daewoo Motor says the company's labor unions had given notice that partial strikes would be held at two other plants in Changwon and Kunsan on Tuesday. He says work will not be disrupted at either plant.

Protests not expected to spread

Company officials have said they do not expect the unrest to spread to the other plants because the 5,000 workers at Kunsan and Changwon were not expected to join in.

Production at Pupyong has been shut down from February 12 to March 6 to allow Daewoo to run down its inventory. The workers had been protesting the Friday's layoff of 1750 workers from the plant.

Daewoo Motor, a unit of the giant Daewoo Group, is bankrupt and the South Korean Government has been attempting to attract a buyer by lowering its cost base. The Pupyong layoffs heralded the first stage of a broader reduction of Daewoo's workforce by 44 percent to about 10,500.

South Korea's third-largest car maker went bust in the fallout of the 1998 Asian economic crisis, filing for bankruptcy under the weight of more than $10 billion in debts.

More arrests over billion dollar slush fund

Meanwhile, authorities on Monday indicted 34 Daewoo Group executives and advisors for alleged involvement in operating a multibillion-dollar slush fund.

Prosecutors say Daewoo raised $20 billion through illegal foreign exchange loans through the group's London office and by using false documents to pool funds from Daewoo's many subdivisions.

Seven executives were arrested, including former Daewoo Corp president Chang Byong-joo.

Daewoo's defense is that the money was used to expand its offshore operations, but regulators accuse it of keeping as much as $8 billion in a slush fund for Daewoo Group founder and former chairman Kim Woo-choong, who remains at large.

Reuters contributed to this report.

Daewoo International

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