Hyundai Motor at crossroads

The labor union at Hyundai Motor, which has been known worldwide for years for its militant strikes, has elected a new leader - a moderate. Hardly a year has ever gone by since the Hyundai union’s founding without a strike. So for it to choose a centrist chief signals a return to the union’s original purpose - that is, to protect the rights and interests of union workers, like some 20 other labor unions that have left the Korean Confederation of Trade Unions. Many within the Hyundai union also reportedly believed that it would soon collapse if it continued to let itself be dragged down by the KCTU’s politically-charged struggles. Lee Kyung-hun, the newly-elected leader, said to push for a fight would be to deceive unionists.

We believe the Hyundai Motor union’s recognition of reality will be the beginning of the gradual birth of a harmonious labor-management relationship at the company. If the two sides can come together, then it isn’t impossible for Hyundai Motor to reach the highest echelons of the global market. Add stable union-management ties to Hyundai’s world-class technology, and we’ll have a formidable combination. At the base of Toyota’s dominance on the world market is a half-century with no work stoppages. That company’s union and management shared the fruits of success.

In the past it would be difficult to deny that the labor union at Hyundai has made unilateral demands on the company while holding auto production hostage. It reached a point where the company, trying to avoid dealing with the union, set up a new production portfolio for its overseas plants. Of course, it is the right and the duty of the union to ensure transparent management and fair distribution, and make demands when warranted. But if the union wants to secure more benefits for its members, then it has to increase its productivity and grow the pie. To do that, the abnormal practice of union meddling with the company’s management and personnel decisions must be fixed quickly. And the union must not be swayed by extreme orders from an umbrella organization. Though its leadership is now moderate, the union still belongs to the KCTU, which demands blind loyalty from its member unions. The new leadership at Hyundai Motor must be determined to reject unreasonable demands, even in a difficult situation. If the pressure continues to pile on, then it could consider leaving the umbrella body.

Following the global economic crisis, the international auto market has been rapidly changing. Everyone is fighting for dear life. It’s up to the union whether Hyundai Motor will follow the path of Ford or Chrysler, undone by their militant unions, or that of Toyota.