[IDEA2050_000E]
by Sehwon Hwang(Research Manager of LAB2050)
“Did you really cry when the Kockums crane was sold to Hyundai Heavy Industries?”
“Of course, we did. The crane symbolized our lives.”
I was expecting a different answer. Koreans still remember Malmö with the phrase ‘Tears of Malmö.’ When Sweden lost a competitive edge in the shipbuilding industry in the 1980s after some 180 years of dominance, the city’s Kockums shipyard closed down and a giant crane that used to stand at the shipyard was sold to Hyundai Heavy Industries in 2002 for only a dollar. Residents of Malmö shed tears as the crane was disassembled, which spawned the phrase ‘Tears of Malmö.’
Malmö, perhaps because of this story, used to be thought of as a city that lost industrial competitiveness for a while in Korea. Some even said, “We should gather ourselves up if we don’t want our city to end up like Malmö.”
Successfully transformed city, Malmö
When I visited Malmö in 2010, however, the city had gone through significant change. It was an environmentally friendly hub of IT and future-oriented technologies, a city that harmonized research and industries, and a ‘young city’ that attracted the youth in Europe. The clean and orderly city landscape was in accordance with the explanation of the city.
Malmö announced a transition into a ‘knowledge-based green city’ from a manufacturing city when the industry declined in the 1990s. It embarked on new projects such as building the Øresund Bridge connecting the city with Copenhagen, Denmark and founding the University of Malmö. It created an environment where technology-intensive and future-oriented industries such as medical and IT industries could flourish rather than inviting large businesses or factories. Turning Torso, the second highest building in Europe that only uses eco-friendly energy, symbolizes innovation that Malmö took up.
One-time Newcomer falls into a crisis
Korea’s shipbuilding industry, which competed with Sweden once, faced a crisis in 2010 and laid off a lot of workers. Jobs in other manufacturing sectors such as automobile industry are shaky nowadays along with the sluggish global economic growth, trade protectionism followed by reduced exports and the rise of automation and unmanned technology coming from rapid technological advancement.
A GM automobile factory in Gunsan, Korea shut down in 2018 and laid off thousands of workers. Most workers in large manufacturers have spent most of their life working for a company and are the provider for their family. Evaporation of manufacturing jobs would spell confusion in homes and local economy. Cities that depend much on the manufacturing industry could turn into a rustbelt city.
Malmö has become a successful model in Korea. The city is often mentioned in discussions and debates, which made me wonder if it is truly a success model that Korea can follow.
Interview with former shipyard workers
I visited Malmö for the ‘A Study on the Measures for the Change of Job Landscape’ of LAB2050 in October 2018. I wanted to find out whether its direction of change was right from the perspective of shipyard workers and whether the workers were invited to participate in the process of change.
I interviewed four former workers who worked at the shipyard for a long time, a former government insider who led the change and those who are currently responsible for retraining Malmö’s workers and stabilizing their livelihood.
During those interviews, I felt things were very different from my expectations. Whenever I heard the phrase ‘Tears of Malmö,’ I doubted that citizens really cried as the crane was disassembled because the city survived even though the shipyard did not. I asked former shipyard workers John-Eric Olsson and Bengt Antoniusson if they really cried. The workers in their 80s and 70s, said, “Of course!”
“I know the crane is in Ulsan, Korea. Kockums workers including me wished the city and politicians would keep it here. Kockums was our life and the crane symbolized it.”
“I saw a TV program about Korea’s shipbuilding industry on the Discovery channel. The ships were the same as the ones we used to build. I was very sad when the shipyard closed. We had techniques to build any ship, but all those know-hows were about to become useless. I loved my job, and I enjoyed every minute working at the shipyard.”
Their eyes twinkled as they talked about the time they worked at the shipyard. Surely, the shipyard offered good jobs, but I thought they would have been greatly hurt by the closedown and they would have strongly resisted. Former labor union representative Olsson said otherwise.
“We knew that the management and the government did their best. I knew this because labor unions are a part of boards in Sweden. Labor union representatives including myself even talked with then Prime Minister Olof Palme. Everyone tried their best, but we just were not able to stop the closedown. That’s all. Afterwards, we worked on ways to protect workers and maintain the city instead.”
Shipyard workers in Malmö were well-paid just as those in Korea. Then wouldn’t their livelihoods have become more difficult after leaving the shipyard? Were they able to jump onto another job right away?
They said most workers did. It was not difficult to come by another job because the submarine building dock of the shipyard stayed a little longer after the dock for large vessels closed down, and there were other manufacturing businesses such as train factories.
Some went through difficulties, for sure. Thomas Olsson who worked for Kockums for 26 years since he was 15 was not able to settle down for a while after landing another job.
“The closedown was a big event for all of us. We thought we would stick to a job after scoring one. I realized that could not be the case for the first time. I couldn’t stay in a job for a long time after I left Kockums. I went from job to job, and I have even been fired. I once received employment benefits for about a year as I couldn’t find a job.”
But there was no significant change in his life. He did not have to move to another city, could afford a doctor and his children did not have to give up their dream due to financial reasons. It is because tuition for secondary and tertiary education is free and citizens can receive unemployment benefits, pensions, medical fees even though they have not stayed in a job for a long time in Sweden.
Differences between Korea and Sweden
During the interview, I spent a long time to make them understand that losing a job in Korea could mean death. In Korea, there is a stark difference in salaries and benefits between large companies and small and medium-sized enterprises. Even those who are laid off from a large company after many years of service can receive only a small amount of unemployment benefits up to six months. Home loans they took out while working at a company come with a raised interest rate and extension on the loan can be denied when the borrower retires.
University tuition in Korea is quite expensive (5000~7000 USD annually), which is why the best corporate benefit is university tuition support for children and children are affected when workers are laid off. It is even more difficult for workers to study to land another job. That is why workers strongly resist when they are about to be laid off. Some even commit suicide due to extreme stress and threatened livelihood.
It was after I explained everything above that the Swedish workers understood the Korean phrase, ‘Laying off is killing.’ Then they calmly said, “No such thing happens here.”
Even in Sweden, those who lose their long-time job feel anxious. They have no choice but to hope that the government would go out of its way to create more jobs.
Amid the situation, Malmö announced to shift its focus away from the manufacturing industry to become an eco-friendly city which might have been a foreign concept at that time. Workers could have opposed to the idea. However, Malmö’s former Mayor Ilmar Reepalu who led the change said, “We had a long discussion with various stakeholders, but there was no major objection.”
“The situation was bleak in Malmö. The unemployment rate sored to 22% in a short period of time. We did try to attract other industries. We invited SAAB’s automobile factory acquired by GM to the shipyard site, but it closed down in three years. It was hopeless, which was why a new attempt gained ground. What’s important is to make sure the citizens and workers actively participate in the process of change. They should feel the pride that they are the ones who are driving change and creating a new city.”
A change no one excluded
The first project that Reepalu took on after taking office was establishing a task force composed of citizens and experts to discuss what kind of image they wanted Malmö to have as a city. Thanks to citizens’ heightened interest in environmental issues after the Rio Earth Summit in 1992 and a high level of support from the youth, the vision of ‘Eco-friendly City’ was adopted.
Crister Persson, a former public servant at the city hall and head of the task force composed of the government, labor unions and citizens and now an incumbent professor at the University of Malmö, said the process to reach social consensus was long and strenuous.
“We didn’t have social media or smartphones then, which was why it was difficult to share and aggregate opinions. We tried hard to not exclude anyone during the decision-making process by talking with citizens in various social occasions such as the annual Malmö Festival.”
They added details to the vision until 2000 when it was officially announced under the name ‘Malmö 2000.’ It contains a goal to create the most sustainable city by 2020 and a plan to transition from labor-intensive industries to high tech industries such as renewable energy, IT and bio to make Malmö a Knowledge City.
“The long transitioning process was smooth because citizens believed that they chose the vision themselves,” said Reepalu. Furthermore, citizens proudly believed that they were creating the first and the most sustainable city in the world, and what they were doing would benefit the entire world. They taught this in elementary, middle and high schools, which was why adolescents and their parents showed a high level of support.
At the same time, the government provided careful support to the laid-off workers. Based on the unique system in Sweden, Skåne County provided them training and consulting while Malmö provided support to stabilize their livelihood. Besides that, Malmö actively formulated and utilized necessary policies to prevent the workers’ lives from becoming unstable. For instance, those who lived in public housing and repaired their houses on their own received exemption or reduction on rent so that they would not be kicked out when they could not pay their rent.
Former reporter and Malmö’s social innovation consultant Bjarne Stenquist shared a piece of advice to Koreans who see Malmö as a success case.
“Manufacturing jobs all around the world are facing big changes. I believe sharing the experience of other cities is a good approach. But we should note that situations and social conditions are unique in each city. Malmö went for a drastic change in terms of city development and industrial transition, but it still needs to work on social integration policies for immigrants and policies to reduce inequality.”
Stenquist said efforts should be taken to integrate views of citizens, labor unions, experts and the government to resolve a job creation issue. He highlighted the importance of taking the right approach.
How can social dialogue possible?
I thought of laid-off GM factory workers in Gunsan during the interviews. It has only been three months since they were laid off, but they said their and their family’s lives have already changed in many ways. One even said he forced his child to find a more stable job rather than taking risks. Workers were excluded in the process to negotiate the factory shutdown, which is understandably why they have deep-rooted mistrust towards the government and the management. Even worse, they are pressured to find another job as soon as possible as they are having difficulties in making ends meet. Pondering over what they really want to do or what they are good at is a luxury that they cannot enjoy.
This is only a start. When the manufacturing industry goes further into the transitioning period, numerous people will face the same risk. Korea’s employment insurance and welfare system have too many loopholes to facilitate the successful transition of the cities they live in. It is not easy to change the system in a short period of time. Currently, older and younger generations are fighting each other for limited resources in Korea. The Korean government is trying to resolve the conflict through social discussions, but it has been more of power games rather than discussions so far.
What if there is a country-wide safety net? What more could we do if different generations do not have to fight each other, workers do not have to jump to another job right away after getting laid off, and we start transitioning the cities based on social stability? Wouldn’t we be able to understand each other better and advance into the future together? Doesn’t the growing interest in ‘Universal Basic Income’ come from social instability which makes the citizens more sensitive? I asked myself these questions while summarizing the interviews.
The faces of the former Kockums workers were telling me that they had run a happy life. What struck me the most was the remark below.
“I very much enjoyed working at the shipyard. But Malmö’s transition was natural and even desirable. We need to create an environment where the younger generation can work as much as they want. I am proud that the youth are starting their own businesses and working on more relevant sectors at the very site where the shipyard used to stand.”
joonchigirl@lab2050.org
LAB2050 is an independent think tank based in Seoul, Korea. We study public policies to lay a social foundation for the next generation who will be living in 2050. We also design policy experiments to examine their impact.
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