Leave them alone, let them workTroubled newsmakers Ssangyong Motor and Hanjin Heavy Industries and Construction are making a strong comeback. Many doubted if the manufacturers - whose major layoffs amid liquidity crises came under spotlight for violent labor protests, including atop a tower crane, a convoy of buses and vans, and camping out hunger strike - would ever make a turnaround.
But the two industrial companies began to make profit in the spring. Ssangyong Motor hit a home run with its new sport utility models Korando C and Turismo. Korando models underwent attractive makeovers inside and out and improved greatly in fuel efficiency and driving comfort. The multipurpose cars struck a note with the increasing population of campers and outdoor leisure-seekers. The 11-seater Turismo also benefited from access to bus-only lanes. The automaker cleverly discovered the niche demand in the saturated local car market. Ssangyong has also pledged to rehire former employees when its annual production hits 240,000 units. From current demand, the company will easily meet an output of 190,000 this year, and it is preparing a promising new model for next year.
Hanjin Heavy Industries is also breathing easier. For the past five years, its shipyard in Yeongdo received zero orders. Its European clients were struggling with a liquidity freeze on the continent and Chinese rivals were stealing orders through unfair dumping.
But spring arrived, and the Yeongdo shipyard received four orders for large vessels from European clients. The ship maker is also negotiating contracts for high-value drill ships. Life and steam have returned to the shipyard. Employees who were forced to go on unpaid leave are reporting back to work.
We need to study different scenes in the two industrial sites. Five years ago, Ssangyong Motor’s 7,154 employees produced 81,400 vehicles. This year, 4,840 turned out twice the number of vehicles. Productivity has jumped nearly fourfold. In other words, the company had employed too many workers in the past. Were the drastic restructuring and massive layoffs outrageous? They now look more like bold moves by management to save the company.
The outlook and sustainability for the two companies still remain shaky. In order to continue to profit, Hanjin must diversify its business line to more exclusive and technology-oriented fields. But the Yeongdo shipyard can hardly accommodate value-added ship orders. It’s too small to build large containers and natural gas carriers or maritime plants. It would have to go to the sea. But environmental groups won’t likely allow the company to reclaim the sea to expand manufacturing.
Some in the car industry raise suspicions that Mahindra & Mahindra, which took over the Korean automaker in 2011, is merely out to steal their technology know-how. But the Indian company would not have acquired the debt-ridden automaker with a powerful union and high labor costs if it didn’t have an eye on Ssangyong’s technology.
Like it or not, Mahindra owns Ssangyong. If the company steals away Ssangyong’s profit and technology, local tax authorities will do their work. Ssangyong Motor’s mindset needs a makeover as much as its vehicles do. It owes Mahindra for keeping its manufacturing lines rolling and retaining 5,000 people on payroll.
Our society had been too emotional about the Ssangyong and Hanjin crisis. Unions of the two companies compared themselves with their counterparts at Hyundai Motor and Hyundai Heavy Industries, enjoying job security and fat paychecks. But their competitor is not Hyundai, but the Chinese and Filipinos who do the same work for a much cheaper price. Politicians and labor activists stirred the public by saying you could be next one out on the street without a job. People jumped on vans and buses heading to demonstration sites to sympathize with the laid-off workers.
The long crisis at Ssangyong and Hanjin left a traumatic scar on the society. The two companies’ turnaround, however, is not due to violent protests or the Hope Bus movement. They recovered by coming up with better products at better prices, and they became thinner and more productive. Only after the buses of hope left did the seeds of hope sprout from their workplaces.
If labor activists really care for workers and wish them well, they should leave them alone.
*The author is an editorial writer of the JoongAng Ilbo.
by Lee Chul-ho