Union chief has tough jobElected as the new labor union chief of Hyundai Motor is a person well known as a hard-line character. After beating a middle-of-the-road, moderate candidate, he said that he would prepare group wage negotiations that “fully take into consideration the national economy and the company’s situation.” Despite this comment, there are views that no major changes will be seen on the basis of the labor union’s hardcore combative spirit.
His pledges include promises that are difficult for the company to accept, such as raising bonuses by 100 percent and extending the retirement age by two years. There are also possibilities that there may be a nerve war with management since this is the first negotiation since the labor union converted to a union categorized by industry sector rather than by company.
It is tiring to even speak of the crippled history of Hyundai Motor’s labor union. Since 1987, they have spent 351 days on strike, practically playing around for a full year. From the very start of the year, even when the company was in a bad situation, the labor union refused to yield its share, tying red bands on their heads. The damage from strikes during the past 20 years amounts to 10.85 trillion won, which is passed on to the Korean people who buy Hyundai cars and the 7,300-some affiliated companies.
The company’s competitiveness has also gone down the drain. According to a research institute in the United States, if Hyundai Motor’s wage cost per head is 100, than Toyota is 65 and Honda is 88. When producing a car, Toyota takes 22 hours, while Hyundai takes 30. Toyota achieved record profits last year of 20 trillion won and yet it only raised basic wages by 8,000 won per month. In order to maintain competitiveness, labor and management have agreed once more to tighten their belts. They don’t even dream of conflict between labor and management. We are not just envious, but jealous.
Hyundai Motor Chairman Chung Mong-koo worried that Japanese firms are raising their level of restraint and that Chinese companies are quickly catching up and are “right below our chin.”
The first step in resolving this crisis is to begin dealing strictly with the labor union, according to laws and principles. The newly-appointed union head and the union should take heed that their jobs exist only if the company does.
If the labor union does not change, they will receive lay-off notices, just like the 75,000 labor union workers at the three U.S. auto companies.