Auto parts suppliers call for looser regulationsKorea’s auto parts suppliers on Wednesday demanded the government give more leeway in terms of regulations on wages and work hours, claiming the industry is currently facing tough challenges at home and abroad.
The Korea Auto Industries Cooperative Association, the Korea Academy of Motor Industry and the Foundation of Korea Automotive Parts Industry Promotion released a joint statement saying the government should lend support to help local firms currently struggling with falling exports.
According to the organizations, Korea’s production of cars fell 7.2 percent year on year in 2016 to become the world’s No. 6 player. The country’s export of cars came to 1.32 million units in the first half, the lowest tally since 938,837 posted in 2009.
Exports to China also dropped sharply due to the diplomatic tension between Seoul and Beijing surrounding the deployment of an advanced U.S. missile defense system in the country, they added.
“Small and midsize business partners producing auto parts, which account for half of all sales, are suffering from falling earnings and sluggish operation,” the organizations aid.
The groups also claimed the ongoing debate over the standard wage may also rise as another challenge for smaller firms. The standard wage is important because it acts as the base measure for calculating the pay rate for overtime and severance payments.
A Korean court earlier ruled that all types of bonuses, if given uniformly and regularly to workers, must be viewed as being part of standard pay. YONHAP
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