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 Company Plans to Build an R&D Center on Land Within an Aging Industrial Complex Regeneration Project … Production at Busan Plant to Be Relocated to Indonesia

▲ Workers affiliated with the Federation of Manufacturing Industries under the Federation of Korean Trade Unions (FKTU) hold a press conference in front of the Seoul Regional Employment and Labor Office on the morning of October 19, calling for an end to alleged anti-union practices at LS Cable & System, Windsor Global, and DongSung Chemical. Photo: Jung Ki-hoon

ongSung Chemical, a specialty chemical materials manufacturer, is facing a labor dispute over its plan to relocate production from its Busan Plant No. 1 to Indonesia. The conflict arose after the company unilaterally introduced a voluntary retirement program without prior consultation with workers on employment-related matters. Most of the employees who initially applied for voluntary retirement have reportedly submitted documents withdrawing their applications. The labor union suspects that the company is aggressively downsizing its production facilities to increase the asset value of its factory site.

Voluntary Retirement Applicants: “Announcement of Plant Closure Pressured Workers to Resign”

According to information obtained by Maeil Labor News on October 19, DongSung Chemical has been pursuing a restructuring plan since late last year to discontinue production of shoe-grade polyurethane and adhesives, the main product lines at Busan Plant No. 1, and transfer the corresponding production volumes to its Indonesian subsidiary. The company aims to complete the restructuring by the end of this year.

The central issue is that the restructuring has proceeded without sufficient consideration of workers' employment security or prior consultation with employees. The company initially terminated employment relationships with non-regular workers. According to the DongSung Chemical Labor Union, headed by Chairman Kim Hyun-dae, the company notified 13 employees working under post-retirement fixed-term contracts on December 6 last year that their employment would end on December 25. On January 9 this year, the company announced that it would adjust staffing levels to optimize production at its Busan plant. It also notified two workers who were approaching conversion to indefinite-term employment contracts that their contracts would be terminated.

Subsequently, regular employees also became subject to the voluntary retirement program. In March, management explained to employees that overseas plants were operating at low utilization rates and that production volumes from the Busan plant would therefore be transferred overseas to improve capacity utilization. Management sought employees' consent to the plan. When workers asked about their employment prospects, the company raised the possibility of voluntary retirement.

Three days before the voluntary retirement application deadline, management sent text messages to employees. One day before the deadline, the company held an information session and reportedly told workers: 

“Since the plant will be closed anyway, those who do not apply for voluntary retirement will leave without receiving any compensation.”

Ultimately, five employees left the company, while another 24 applied for voluntary retirement on the condition that their employment would end at the close of this year.

The union considers these actions a violation of the collective bargaining agreement and has filed an application for relief with the Regional Labor Relations Commission. According to the union, the collective bargaining agreement requires the employer to obtain the union's prior consent before making personnel assignments or transfers. The union argues that management violated this provision. Of the 24 employees who initially applied for voluntary retirement, 18 have since submitted authorization forms to the union to withdraw their applications.

“The Company Must Explain Why It Is Giving Up KRW 30 Billion in Domestic Sales”

The union suspects that the company's aggressive relocation of production from its Busan plant is motivated by a desire to increase asset values through real estate development. An industrial complex regeneration project is currently underway in the Sinpyeong?Jangnim Industrial Complex area of Busan, where the company's plant is located. The union believes that the company may intend to close the existing production facilities and establish a research and development (R&D) center on the site to enhance the property's value.

Union Chairman Kim Hyun-dae stated:

“The company is generating profits from domestic sales amounting to approximately KRW 30 billion, and we see no compelling reason for it to abandon this business and sacrifice workers' employment merely to relocate production facilities.”

He added:

“We suspect that the company is seeking various government subsidies and preferential treatment related to changes in land-use classifications. The company must clearly disclose its true intentions behind this restructuring plan.”

The Federation of Manufacturing Industries, affiliated with the FKTU, held a press conference in front of the Seoul Regional Employment and Labor Office in Jung-gu, Seoul, on the morning of October 19. At the press conference, the federation criticized the company, stating:

“Why should frontline workers bear the consequences of reckless overseas plant expansion and failed investments?” The federation demanded that management reinstate dismissed workers to their former positions and engage in collective bargaining aimed at maintaining production operations at the Busan plant. In response, a DongSung Chemical representative explained in a telephone interview with Maeil Labor News:

“The relocation of production is a strategic business decision intended to maximize our responsiveness to market conditions, reflecting the relocation of our customers' production bases and growing demand in Southeast Asian markets.”

The representative continued:

“The underutilized site will be transformed into an integrated R&D and technology center for the group, strengthening our future technological competitiveness.” Regarding concerns over employment security, the representative stated:

“Employees who have not applied for voluntary retirement will continue performing their assigned duties at the workplace.”

The representative added:

“We have minimized the number of employees affected by workforce adjustments by reassigning some regular employees to our overseas subsidiaries and transferring others to our nearby Sinpyeong plant.”

Reporter: Lim Se-woong Published: October 20, 2026, 6:30 a.m. Email: imsw@labortoday.co.kr

Source: Maeil Labor News Website: https://www.labortoday.co.kr