Union needs a reality check

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Union needs a reality check

The labor union of South Korea’s largest automaker, Hyundai Motor, is poised to strike. The union may be the costliest in the world, yet it remains ever-demanding. Permanent workers at Hyundai Motor earn 94 million won ($84,000) a year on average, but the union had a list of 180 new demands in collective bargaining this year. It demands 30 percent payment from the company’s 2012 net profit, extension of the retirement age to 61 and 10 million won for each worker whose children do not go to college.

Hyundai Motor raked up a net profit of 5.27 trillion won last year, thanks mostly to the performance of its overseas operations. It is up to labor and management to settle their differences. But society is turning critical of the spread of elitism and arrogance in unionized workplaces.

Hyundai Motor’s industrial hub in Ulsan lags behind the manufacturing bases of Toyota or Ford in productivity. It records poor output compared with Hyundai’s plants in other parts of the world. The society won’t be able to stop management if it decides to give up home production and instead bolster industrial activity overseas. We may one day lose one of the country’s largest industrial producers and workplaces, not to mention a major manufacturing hub.

The Ulsan plant can no longer profit by manufacturing the small Avante sedan. It may even lose luxury brands, such as the Genesis, to overseas plants. Consumers weary of annual labor strikes are beginning to shun local brands. Foreign cars already make up 10 percent of total auto sales. BMW’s Korea outlet predicts that the share of foreign brands in the Korean market could reach 25 percent. At that point, foreign brands may earn more than local brands.

Hyundai Motor employees must change their perspective if they want to prolong their heyday. It will not be easy for them to give up their wages and welfare benefits. To prevent that from happening, they need to work harder to boost productivity. They must end their walkouts and disruption of production. They should be willing to work in rotation according to market conditions and demand. The union’s future relies on productivity if it really wants to avoid the tragic end of workplaces at Hanjin Heavy Industries and Ssangyong Motor.
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