Hyundai, Kia broaden support for suppliersIn a prompt response to President Moon Jae-in’s new economic initiative, Hyundai Motor and its sister company Kia Motors announced Thursday that they will create a 50 billion won ($44.4 million) fund for second- and third-tier suppliers that provide auto parts. The fund will be used to support initiatives to stabilize job positions, expand welfare systems and develop R&D capacity at the suppliers.
The nation’s top two automakers maintain close ties with first-tier suppliers but have not developed supportive relationships with suppliers at lower levels.
The five strategies Hyundai and Kia announced Thursday include expanding support from 300 first-tier subcontractors to more than 5,000 suppliers that neither Hyundai nor Kia directly work with.
“Hyundai and Kia propose a model that supports second- and third-tier suppliers that don’t have direct relationships with the carmakers but are considered a core part of the automotive industry,” the company said. “We will also fortify the system where first tier suppliers can maintain win-win partnerships with second- and third-tier suppliers.”
Hyundai and Kia will also create a 100 billion won loan fund exclusively for second- and third-tier suppliers. When added to the already existing fund for first-tier suppliers, Hyundai and Kia said they have created a fund collectively worth 730 billion won.
The automakers’ move came a day after President Moon laid out his administration’s five-year national economic plan on Wednesday. Moon emphasized fair competition, especially between conglomerates and their subcontractors. He pledged to form a committee dedicated to preventing unfair competition and exploitation by conglomerates. Moon said he will oversee the committee directly.
The automotive group also said it will set up a center where employees from the second- and third-tier subcontractors receive education and training. For those who wish to start businesses abroad, Hyundai and Kia said they will provide consulting programs that help subcontractors obtain licenses abroad.
In line with the new administration’s zealous effort to resolve Korea’s high unemployment rate, the nation’s second biggest conglomerate by market capitalization pledged to expand a job fair formerly limited to first and second-tier subcontractors to third-tier suppliers as well. The automotive group will test a separate job fair exclusively for second- and third-tier suppliers from next year in selected areas, including Ulsan and Ansan.
BY JIN EUN-SOO [email@example.com]
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