Adapt or fall behind, union says

With electric vehicles and car-sharing services threatening to shake up the auto industry, the Korean Metal Workers’ Union, one of the country’s largest labor groups, urged its counterparts in other industries to adopt strategies that will secure jobs for their workers rather than go against the current through violent means.

“It is not possible to stop changes in the auto industry through actions akin to the Luddites,” the union’s research institute wrote in a report, referring to a group of 19th-century English textile workers who destroyed machinery that they believed threatened their jobs. “Instead of focusing on short-term economic gains, [unions] should focus on having social dialogue [with companies and other stakeholders] for the sake of long-term employment.”

The Korean Metal Workers’ Union includes the unions of local automakers and shapers and is considered a hard-line labor rights group. The report, written by Kim Sung-hyuk, director of the research institute, said, “The auto industry, once centered on production and sales, is transforming into a mobility service industry that includes car-sharing and ride-hailing.”

In the United States, the number of Americans using car-sharing services has gone from 8.2 million in 2014 to 12.4 million in 2015. By 2020, this number is expected to nearly double to 20.4 million. For local automakers, the United States is considered a key market, and the prevalence of car-sharing could reduce production volume since fewer individuals will feel the need to own a car.

The trend is also catching on in Korea, where SoCar, the country’s leading car-sharing start-up, has attracted more than two million users since its launch in 2011.

The union’s report explained that the drastic changes in consumer patterns will also reorganize jobs in production and recommended unions also transform themselves, just as the unions at Korea’s two biggest automakers, Hyundai Motor and Kia Motors, are set to go on strike over a wage dispute. The union at Hyundai Motor is expected to go on strike next week.

The report forecast that vehicles running on internal combustion engines will go nearly extinct in the future and be replaced by electric vehicles. The Ministry of Land, Infrastructure and Transport estimates there will be about 26,000 electric cars on Korean roads by the end of this year.

While owning an electric car in Korea is still regarded as impractical due to the lack of conveniences like readily available charging stations, auto industry experts believe the continuous development of battery technology will make them better options for consumers over conventional vehicles that run on gas or diesel.

The union’s report predicted that self-driving cars will also become widely available, rendering jobs like taxi drivers and truck drivers obsolete. Instead, the report said, new jobs like automobile software developer will emerge, and people will perceive cars as something they share rather than own.

“The production of new vehicles will go from 247 million cars in 2020 to 44 million cars in 2030, a nearly 70 percent drop,” the report said, adding that the rise of electric cars will lead to a fall in demand for oil from 100 million barrels per day in 2020 to less than 70 million barrels per day in just a decade. This will drag down not only the price of oil but also related industries like pipeline manufacturing.

Auto unions must brace for such changes, the report warned. It advised unions not to be preoccupied with getting their piece of the pie. “Unions are insensitive to social changes because they are too focused on wage negotiation. While this may lead to handsome bonuses during a boom in the industry, it can also lead to drastic restructuring during recessions.”

The report recommended union representatives strive to ensure jobs for workers in the industry. It suggested the creation of committees focused on adapting to inevitable changes in the sector. Instead of taking profits from companies, the report said, unions and workers should consider ways to create jobs and reassign employees.

“What used to be done by skilled workers will be replaced by automation and computers,” the report concluded, adding that human workers should be able to understand the entire workflow and assume more of a managing role that is applicable regardless of the industry. “Unions must educate and train the workforce when new technologies are adopted.”

The report noted that Korea lacks a system where stakeholders from the government, companies, unions and academia can gather to discuss solutions. Such comprehensive governance is necessary, the report said, for productive discussions on how to maintain employment in periods of great technological change.

BY KIM KI-CHAN, CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]