President-elect Park Geun-hye on Wednesday urged conglomerates to refrain from layoffs and share more with smaller businesses in her first meeting with business leaders after the Dec. 19 election.

She also called on chaebol owners to take self-reform measures and cooperate with her economic democratization policy aimed at boosting fairness and transparency in the market and increasing welfare for low-income citizens.

“I will actively support investment aimed at creating future growth engines and jobs. I urge large conglomerates to change your ways as well,” Park said during her meeting with the representatives of large businesses at the Federation of Korean Industries.

It was her third stop for the day after earlier meetings with representatives of small retailers and small and medium-sized businesses, where she promised to better protect their trade.

Explaining that the growth of large conglomerates was achieved with the support and sacrifice of the people, Park emphasized, “I therefore believe that large conglomerates should not remain fixated on maximizing the company’s profits as their management purpose but seek co-prosperity among the entire community.”

Park’s visits to the business sector as her first formal scheduled event since winning presidency on Dec. 19 was seen to be aimed at highlighting her resolve to follow through her economic democratization drive.

Park had faced criticism from opponents during her campaign for excluding regulatory measures to propel chaebol reform. She instead has called for encouraging self-reform while curbing unfair activities.

The president-elect urged the business leaders to take the lead in sharing the pain at times of management difficulties by refraining from restructuring or layoffs and retaining the workers as much as possible.

Taking a step further, Park warned against conglomerates’ intrusion into industries better fit for smaller-sized businesses and second and third generations of chaebol from excessively buying out real estate.

“Large companies should compete against global companies instead of taking away the territory of small and mid-sized businesses.”

In response, the FKI representatives said they will cooperate with the new government to invest for the future and create new jobs. They also said they will seek mutual growth and add momentum to their corporate social responsibility activities, according to Park’s spokeswoman Cho Yoon-sun.

Present at the meeting were GS Group and the Federation of Korean Industries chairman Huh Chang-soo, SK Group chairman Chey Tae-won. Hyundai Motor Group chairman Chung Mong-koo and LG Group chairman Koo Bon-moo.

During the meeting, the attendants also explained to the president-elect their reservation against the pending bill to create a compulsory closing day for large retailers and the anticipated ban against new cross-shareholding. They also asked for a system enabling temporary financial support for companies excelling in internationally competitive fields and to expand the leeway for businesses to participate in cultural welfare projects.

Park, in turn, said the current bill on large retailer reflects concessions from all sides and should thus be passed through the parliament at an early date, and that her government will also cooperate with the conglomerates describing them as having unrivaled global competitiveness, Cho said.

Park’s remarks toward the conglomerates followed her earlier meetings with the representatives of the Korea Federation of Small and Medium Business and the Korea Federation of Retailer Organizations.

“I will provide support so that the (economy) centered on large companies will be shifted around small and mid-sized businesses to create new jobs,” Park said.

Pledging to correct the system where large conglomerates dictate relations, Park said the unfair practice of large businesses forcefully lowering contract prices or their rash advancements into industries of small and medium sized businesses would be sternly eradicated.

In-between her meetings, the president-elect also talked about the pending agreement on next year’s budget at the National Assembly.

“In order to actualize the promises that I gave to resurrect the public’s livelihoods, some degree of state bond issuance is inevitable,” Park told reporters.

The rivaling parties have been locking horns over the budget plan following the Saenuri Party’s proposal to increase the amount by 6 trillion won for measures to boost the economy and cover increased welfare.

Although the parties agreed to pass the budget by Friday, the opposition Democratic United Party is opposed to the proposal to issue bonds, instead calling for the incoming government to nullify tax benefits given to the rich by the incumbent Lee Myung-bak administration. 

By Lee Joo-hee (jhl@heraldcorp.com)