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Don’t turn Ulsan into Detroit

Published: 22 May. 2015, 00:50

A group of former union leaders from large manufacturers based in the industrial base of Ulsan held a press conference, urging workers to refrain from striking and ruining the local economy. It accused the Korean Confederation of Trade Unions, the militant union umbrella organization, of encouraging strikes based on politics rather than actual labor conditions.

The union leaders were all militant activists who had led violent demonstrations in the 1980s and ’90s. Lee Won-kun, who had led the union at Hyundai Heavy Industries, served an 18-month prison term for spearheading a strike that lasted 128 days. But despite accusations of betraying the union cause, former leaders have come forward because of the gravity of the crisis at Korean industrial sites.

Ulsan is Korea’s richest city, but mining and manufacturing activities in the first quarter fell year-on-year. Employment is sinking. Sales at retailers are sluggish. Restaurants and bars are doing worse than they did during the Asian financial crisis.

Hyundai Heavy Industries incurred a deficit of 1.92 trillion won ($1.76 billion) last year and is doing no better this year. Hyundai Motor’s operating profit is down. Petrochemicals have slumped due to sluggish exports to China. Companies are reducing new hires and encouraging employees to retire early. Labor disputes and strikes could kill the industrial base.

Yet unions are continuing with reckless demands. Hyundai Motor’s union wants its employer to include a provision to discuss output at home and overseas factories with the union in collective bargaining. Hyundai Heavy Industries is also fighting management over restructuring outline. A company is headed for a cliff if a union pursues selfish interests regardless of the dire straits of the company. There are rumors that Hyundai Motor could close down the Ulsan base if it completes its fourth and fifth factories in China. Chung Mong-koo, Hyundai Motor’s chairman, has not visited Ulsan for the last six years due to frequent union walkouts and demands. Local companies are packing up and finding new industrial roosts in China or India.

The crisis is not just the union’s fault. But the unions have to do their part to help companies overcome the difficult times. Subcontractors and local businesses are hurt most from strikes by unions who earn 90 million won a year on average with job security. Unions at large companies must get their act together if they do not want Ulsan to turn into Detroit, which went bankrupt due to the collapse of the U.S. auto industry.

JoongAng Ilbo, May 21, Page 30