"One of the Regional Headquarters" vs "Separate Division": Diverging Views
The organizational restructuring plan has emerged as the biggest issue in the ongoing integration process between Korea Railroad Corporation (KORAIL) and Suseo High-Speed Rail (SR), which is being pursued with a target date of September. The KORAIL labor union wants SR to become one of KORAIL's regional headquarters, while the SR management generally prefers a separate business division system that would allow SR's existing organizational structure to remain largely intact within KORAIL. The SR labor union holds a somewhat fluid position. Although management and labor from both companies, as well as the Ministry of Land, Infrastructure and Transport, are discussing the organizational integration plan, it is reported that their differences remain unresolved. Since the method of organizational structuring could affect employee placement, as well as standards for wages, welfare, and promotion, it is considered the greatest obstacle in the integration process.
SRT, which has Suseo as its designated station, is arriving at Seoul Station. Yonhap News Agency
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According to the railway industry on June 23, a tripartite council, composed of the Ministry of Land, KORAIL and SR labor and management, and external expert members, recently held a meeting at an undisclosed location to discuss organizational restructuring plans following the integration. At this meeting, the main agenda items were the responsibility division system and the regional headquarters system, but no conclusion was reached.
The responsibility division system would place the Suseo-origin high-speed rail work, which SR has been responsible for, within KORAIL but as a separate business unit. Although it would be incorporated under the KORAIL corporation, SRT-related organizations for operations, driving, rolling stock, and planning would be maintained in their entirety, and a division head would oversee the entire segment. In short, since the existing organization is transferred as is, confusion on the ground right after integration can be minimized. KORAIL's existing departments would not need to split up and take over tasks such as SRT ticketing, Suseo Station operations, Suseo-origin train products, or customer management, which have been handled exclusively by SR. In particular, in terms of employee placement, the responsibility division system can serve as a buffer to reduce the shock of integration. It is understood that this reasoning is behind SR management's consideration of the responsibility division system.
In contrast, the regional headquarters system would absorb the Suseo-origin high-speed rail work into KORAIL's existing organization for management. From KORAIL's perspective, using the current structure allows for the reduction of redundant departments and a more streamlined command system after integration. Planning for high-speed rail operations, workforce deployment, safety management, and station operations could all be coordinated within KORAIL's framework, which is closer to the original purpose of unified management through integration.
The reason the organizational integration plan is facing difficulties is due to the significant differences in positions between the companies and their labor unions. It has been reported that the KORAIL labor union is leaning towards integration through the regional headquarters system. There are concerns that if SR functions remain as a separate business unit, KORAIL's existing organization and work would overlap, leading to a situation akin to "two organizations under one roof." Furthermore, the placement of SR headquarters staff could become more complicated. If SR employees feel they are disadvantaged in job assignments or promotions during the process of being absorbed into the regional organization, this could become a source of internal conflict after integration.
On the other hand, SR management maintains that the responsibility division system is necessary to protect non-field staff organizations. There is also an argument that maintaining a separate organization within the company would allow these staff members a re-training period to become familiar with railway work.
One attendee of the meeting stated, "Only the broad framework of the responsibility division system has been proposed so far; there is still no detailed implementation plan for organizational structuring and personnel management."
Some analysts note that the appointment of SR executives is also intertwined with the discussion on organizational structuring. If the SR corporation is dissolved through integration, standing executives would step down from their positions. However, if the responsibility division system is adopted, it would be possible to appoint existing executives. A public institution official who participated in a past integration project commented, "It is standard that when a corporation disappears, so do the positions of standing executives," but added, "Depending on the details of the contract and how the organizational structure is reformed, existing executives could either be given new positions or new appointments could be made." He continued, "It is possible to establish a separate business organization, appoint division head-level positions instead of standing executives, and appoint existing executives to those posts."
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The Ministry of Land, Infrastructure and Transport, which oversees the process, stated that it would monitor the discussions until working-level coordination between the parties is completed. A ministry official said, "KORAIL and SR labor and management are each discussing their own positions," and added, "We will announce the results after matters have been settled," declining to elaborate further.
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