[비즈한국] The strike by Chungho Nais installation and repair engineers has reached its 20th day. This is the first general strike in six years, following the one in 2019. Technicians at Nice Engineering, a subsidiary of Chungho Nais, are demanding company-provided vehicles and an increase in their base salary. The rift between labor and management is deep. The union claims that the conversion to regular status at the subsidiary in 2018 did not lead to any substantial improvement in working conditions. Management argues that the matter falls under the subsidiary's jurisdiction. Despite record-breaking financial performance, the service fees and labor costs paid by Chungho Nais to Nice Engineering have not been raised even once in seven years. With no progress in labor-management negotiations, there are concerns that the strike may be prolonged.
Monthly vehicle operating allowance of 140,000 won is not even enough for gas
"A starting base salary of 2.09 million won—it's 'regular status' in name only." Engineers at Nice Engineering use their "own vehicles." Even if their cars break down while carrying products for work, they have to pay for repairs out of their own pockets. They travel busily to installation sites, covering over 120,000 km in two years, yet the company provides only 140,000 won per month as compensation for vehicle usage.
The engineers raised their voices, stating that the company is passing the costs of vehicles, which are essential for work, onto the employees. One engineer lamented, "The company requires vehicles at the level of a Carnival, which costs around 40 million won. Considering fuel, maintenance, insurance, and depreciation, the allowance is woefully insufficient. Many employees end up with a net salary that is effectively less than 30 million won a year because they lose hundreds of thousands of won each month on expenses." Considering that the maximum depreciation period for a vehicle is six years, a simple calculation shows that a 40-million-won vehicle incurs about 550,000 won in monthly depreciation.
Of course, they receive additional allowances based on the number of installations, but this varies depending on factors such as region. An employee with a base salary of 2.09 million won receives about 400,000 won in allowances if they process around 220 cases a month. They are obligated to handle 160 to 180 cases before any additional allowance kicks in.
The "failure to provide company vehicles" was once a common practice in the home appliance rental industry, but it is now rare. Competitors like Coway021240, SK Magic, and LG Electronics066570 provide vehicles for business use. SK Magic agreed to provide vehicles in 2018, and Coway did so in 2022 through wage and collective bargaining agreements.
Approximately 200 engineers from Nice Engineering went on a general strike starting on the 31st of last month. Their main demands include: developing a plan to provide vehicles, increasing the base salary, and hiring more staff. The starting base salary for a technician is 2.09 million won. They are arguing for a uniform increase of 180,000 won to the base salary to improve a pay structure that falls below the industry average, but management is maintaining a hardline stance. In the first negotiation held since the strike began on the 16th, Nice Engineering proposed a freeze on both base salary and vehicle support funds.
The strike, which was initially planned to last until the 4th, has entered a long-term phase. A 40-person in-house installation team operated by the headquarters has been deployed to the field to cover the vacancy. The union continues to hold collective actions, such as promotional campaigns, near the Chungho Nais headquarters in Seocho-gu, Seoul, and at regional offices across the country. Yang Jun-mo, senior deputy branch head of the Chungho Nais branch of the Korean Home Appliance and Communication Service Union, stated, "Excluding expenses, the company is rejecting all requests for company vehicles, setting usage fees that reflect actual costs, and increasing wages," adding that they plan to continue the strike until the end of April.
'Deficit-ridden' Nice Engineering: Stuck with hiring without any bargaining power
The conflict between Chungho Nais headquarters and the engineers has been repeating for eight years. Back in 2018, during the push for regular status, there was backlash over the "conditional conversion based on a 2-year evaluation," and controversy arose over allegations that staff were coerced into signing agreements stating they would "not demand severance pay for previous periods of employment."
This led to criticism that it was a "trick" by the company to reduce the conversion rate to regular status. Initially, the company stated that about 1,700 engineers would be converted to regular status at the subsidiary based on their preference, but currently, Nice Engineering employs only about 550 people, including 500 regular employees and 50 interns. Many employees left during or after the conversion process due to low wages and inferior conditions compared to the industry average. According to industry sources, many have moved to other companies like SK Magic.
It is also pointed out that this structure is not an operational issue, but rather a result of "cost control" through the subsidiary. The service contract unit prices between Chungho Nais and Nice Engineering have remained the same for seven years. Nice Engineering’s revenue structure is heavily concentrated on service revenue from water purifier installation and maintenance (about 59.4 billion won), which accounts for approximately 99.87% of the total (as of the end of 2024). Although almost all revenue is generated by the engineers' services, the company has prioritized revenue expansion and cost-cutting over improving employee welfare by remaining dependent on Chungho Nais's sales policies, cost calculations, and service structure.
According to each company's audit reports, Chungho Nais's separate revenue last year was 473 billion won, a 4.4% increase from the previous year. It has been on an upward trend for five years, with operating profits of 39.9 billion won in 2022, 45 billion won in 2023, and 67 billion won in 2024. In contrast, Nice Engineering has been recording operating losses, including -1.4 billion won in 2023 and -0.7 billion won in 2024.
Regarding service unit prices, Nice Engineering emphasized, "In terms of inter-company transactions, it is also important to calculate reasonable contract unit prices. The contracts were established after tax and accounting verification."
Nice Engineering plans to continue dialogue with the union to reach an agreement. However, Chungho Nais has not expressed a specific position, citing that the engineers are employed by the subsidiary. A Nice Engineering official stated, "There are differences in size, compensation, and profit/revenue relationships for each company. We believe the union's proposal is currently difficult to accept. If they present a realistic proposal, we will strive to find a reasonable alternative."