Adapt and overcome

MOON HEE-CHEOL
The author is an industrial news writer of the JoongAng Ilbo.

[KIM HOE-RYUNG]

Goliath cranes in Sweden once symbolized the fall of the manufacturing industry. The prime example was when Swedish shipyard Kockums sold a 128-meter (419 feet) Goliath crane, known as the Tears of Malmoe, to Hyundai Heavy Industries in 2002.
But after the fall of the shipbuilding industry, the Swedish people refreshed their pledge, and instead of losing hope, they made investments and reformed regulations to nurture their future car industry. Now a new Goliath crane in Gothenburg has become the symbol of the next-generation manufacturing industry.

Just as in the Swedish shipbuilding industry, there are signs of crisis for Korea’s automobile industry. After the peak in 2011, Korea’s automobile production has continued to decline. The automobile ecosystem of carmakers and part makers began to crumble. The closing of Korea GM’s plant in Gunsan, North Jeolla, in May illustrates the reality of the Korean automobile industry. But it’s not just automobiles. With having to compete against China, the overall manufacturing sector is struggling.

JoongAng Ilbo’s special investigation team toured 10 automobile industry-related cities in seven countries for three months, and thriving countries all have overcome harsh times. Just as the Korean manufacturing industry is being pushed by China, Spain struggled as Eastern European countries had lower wages. But Spain, considered the “Sick man of Europe” at the time, succeeded in labor reform and emerged as a new power in the automobile industry.

Japan and Germany, the big two in the global automobile market, had similar crises. Japan’s Toyota had faced large-scale recalls, but it maintained the merits of a traditional production system and supplemented shortcomings to become the biggest carmaker in the world. Germany had the “diesel gate” but adapted technology to expand its global market share.

While business is an important player in industrial development, the government lays the foundation for its successes. Governments of countries leading the automobile industry promoted the creation of ecosystems, early adoption of technology, systems reform and regulatory reform for the revival of the industry. Meanwhile, the automobile industry in Australia collapsed because labor, management and government did not compromise on their individual stances.

It has been four months since GM Korea closed its Gunsan factory. There is no clear solution yet. However, there is no reason for Korea not to surpass Germany and Japan if it uses this setback as a chance to reinforce its competitiveness. Will Korea follow Australia’s path or will it become like the Swedish? It depends on what the Korean automobile industry does from here.

JoongAng Ilbo, Oct. 5, Page 29