By Kevin Sullivan
Washington Post Foreign Service
Saturday, May 16, 1998; Page A17

ULSAN, South Korea—Ahn Gun Jun stands on a Hyundai Motor Co. assembly line 10 hours a day, bolting heaters onto an endless stream of passing car frames. In return, Hyundai gives Ahn a life.

The company provides a three-room apartment for Ahn, his wife and their 6-year-old son for just $30 a month. The company pays him $800 a month in wages, most of his medical insurance and his son's annual school fees. Someday it will pay half of his college tuition. The family owns a discounted Hyundai car, shops at the three inexpensive local department stores Hyundai owns and enjoys the Hyundai Cultural Center's pool, bowling alley, theater and gym.

But now Ahn is faced with the grim possibility of striking against the company he loves, which has supported him for more than seven years. He said he doesn't want to demonstrate, especially if the protests turn violent, but he said he will follow his union's orders because "I have nowhere else to turn."

The government of President Kim Dae Jung faces no greater problem than how to contain the nation's militant labor unions. South Koreans have watched nervously as street protests have turned bloody in Indonesia, which suffered a similar economic implosion. There, students are leading the protests against the authoritarian rule of President Suharto. But in South Korea, far more industrialized and democratic, the threat of violent street protests is coming from the nation's militant labor unions.

Labor leaders say the government and companies are asking workers to bear too much of the pain of South Korea's economic recovery. And they have vowed to take to the streets in massive numbers in coming weeks, bringing with them workers such as Ahn who do not want to strike but feel they have no alternative.

"At my age, if I got fired, where else could I find work?" asked Hyundai auto worker Lee Hyuk Hoon, 37. "This is my 14th year here; this is all I know how to do. If I have to die sitting down, or die fighting, I'd rather die fighting."

Strikes have loomed since Hyundai announced plans to lay off 20 percent of its 46,000 workers by the end of June, making it the first of South Korea's industrial conglomerates, or chaebols, to do so. Hyundai's sales and production are down 40 percent as the domestic auto market has dried up, and the company says it must drastically reduce its labor force.

With the national economy a shambles, virtually every company is under extreme pressure to streamline its operations to survive -- and that means unprecedented layoffs. About 8,000 people a day are losing jobs, mainly in small- and mid-sized companies, and last year's 2.6 percent unemployment rate is predicted to shoot up to 10 or 12 percent by year's end.

President Kim, a longtime ally of organized labor, persuaded the unions to sign a no-strike agreement earlier this year. He warned them that strikes could scare away much-needed foreign investment. He told them that instead of striking, they should funnel their anger into politics by fielding pro-labor candidates in the June 4 local elections -- the first time labor union candidates will be allowed to run.

But the truce came unglued on May Day, when labor gave the government a taste of its rage, with 20,000 protesters clashing with police in violent demonstrations in Seoul. Other social problems associated with layoffs are increasing as desperate unemployed workers look for ways to ease their situation and feed their families.

Officials say 25 South Koreans a day are committing suicide, and in some cases entire families are killing themselves. Crime is increasing. Robberies were up by almost 50 percent in the first two months of this year, and police said many of the robbers were first-time offenders committing what some here are calling "IMF survival crimes."

A visit to Ulsan, the birthplace and symbolic home of organized labor in South Korea, helps explain the feeling of desperation and the problems faced by this nation's workers. Ulsan, a seaport city of about 1 million people, is a muscular tribute to Korean economic might. Nine major Hyundai companies build cars and ships here, employing more than 100,000 workers and coloring every aspect of life. Everyone's livelihood -- from grocery store clerks to bartenders to cabbage farmers -- depends on Hyundai; even the fire engines are built by Hyundai.

But with the economy in such trouble, workers who thought they were safely locked into the Hyundai family for life feel vulnerable.

Sitting cross-legged on the shiny linoleum floor of his tiny Hyundai apartment, Ahn said that if he is laid off, he will lose his home, his neighbors, his friends -- just about everything in his life. Because so much is at stake, he said, he will demonstrate if the union tells him to. He would rather not swing steel pipes and fight with the police trying to break up union protests, he said, but he may have no choice.

If he is laid off, he said, he would rather try to find work as a taxi driver than kill himself. But he said the thought of losing his job is so terrifying that he couldn't rule that out.

"I can't say I would, and I can't say I wouldn't," Ahn said.

In the United States, a laid-off worker likely would be eligible for unemployment benefits and have opportunities to find a new job in a different field. Before finding a new job, American workers might feel embarrassed or depressed but few would consider killing themselves.

In South Korea, there is almost no security net to catch the jobless and, in the current economy, almost no chance of finding a new job. Also, most of South Korea's union workers are men, and they often equate their jobs with their lives. Losing a job carries enormous social stigma.

Chung Mong Gyu, chairman of Hyundai Motor Co., said the company has tried hard to retain workers and make layoffs as few and painless as possible. But he said the company's grim economic reality, plus government pressure to restructure, leaves Hyundai with no choice. "Korea is a boat in a rough ocean," he said in an interview. "There are 10 people on board. All people cannot survive. We have to throw out two people.

"But the short-term pain, as difficult as it will be, is a necessary precondition if Korean business firms are to restructure and become more efficient in the future," he said.

For South Korean workers, "restructuring" sounds like a fancy way of asking them to give back what they have fought hard to win. South Korea's former authoritarian leaders outlawed unions until 1987. Initially, the companies responded to their new unions in a way that would have made the military dictators proud. Kidnappings, beatings, threats and hired thugs were among their negotiating techniques. Violent protests and strikes were common.

To the Seoul government, the labor strife was a threat to the nation's booming economic growth. So the government took the companies aside and struck a deal: Give the unions most of what they want, keep them quiet, keep them working, and we'll help you pay the costs.

"In the last 10 years, whenever they asked the company for something, we had to meet their request," Chung said.

Union agitation quickly and vastly increased the workers' standard of living, in many cases quadrupling wages over 10 years. New stability among labor helped to create a strong South Korean middle class. But now many companies complain that labor costs are higher here than in most other Asian countries, while productivity lags.

The government, the companies and the unions all say they want a peaceful solution. But, as Kim Kwang Shik, 36, president of the Hyundai Motor Co. employees union, said, "If we have to, we'll fight. Imagine if you lost your job, you did not receive a pension, you had no other job to go to and your children were starving. What would you do? Would you try to keep the peace?"

Special correspondent Hyewook Cheong contributed to this report.