Joint Strikes in 23 Years
On July 19, Hyundai Motor Company and Hyundai Heavy Industries labor unions walked out at the same time, for the first time in 23 years, after having a joint press conference at the Ulsan Plant of the automaker. The partial strike on that day resulted in a production loss of no less than 39 billion won in Hyundai Motor Company alone. The labor union in the carmaker announced that its strike would continue until July 22 and the other union is to halt production on July 20 and 22 as well.
Under the circumstances, it has been pointed out that confrontational labor-management relations are the main culprit of the declining competitiveness of the South Korean automobile industry. The Hyundai Motor Company labor union has gone on strike each year for the past five years.
The Korea Automobile Manufacturers Association held a seminar in Seoul on July 19 to look into the labor reform in the Spanish and Italian automobile sectors. There, the association mentioned that South Korean automakers’ annual production and exports have declined since 2011 and 2012 from 4.66 million and 3.17 million cars, respectively. In the first half of this year, their production volume totaled 2,195,843, down 5.4% from a year ago. Likewise, their total exports during the same period fell 13.3% to 1,338,590.
“Global automobile market leaders have set up cooperative labor-management relations for the sake of survival, but South Korean automakers are still sticking to confrontational relations,” said Kim Yong-geun, chairman of the Korea Automobile Manufacturers Association, adding, “This risk has led to a decline in domestic production and an increase in overseas production.” Between 2010 and 2014, the number of those employed by South Korean carmakers decreased from 91,277 to 85,436.
The association explained that the carmakers’ lack of awareness of global industry environments is negatively affecting their chance of survival as well. “Labor unions in South Korean automakers tend to focus too heavily on their vested rights and pay increase,” it said, continuing, “The five South Korean automakers recorded an average annual pay of 93.13 million won last year, much higher than Toyota workers’ 79.61 million won and Volkswagen workers’ 78.41 million won.”