How to make Korea lose its attractiveness?

PARK SU-RYON
The author is head of the industry news department at the JoongAng Ilbo.

Three U.S. governors visited Korea in a month. Kentucky Gov. Andrew Beshear arrived at Seoul on July 14, and before leaving the United States, he wrote on social media that he was traveling to Japan and Korea to find business partners that can bring good jobs to the state of Kentucky.

On July 9, Texas Gov. Greg Abbott toured Samsung Electronics’ Pyeongtaek fab and said that Samsung’s new fab in Taylor, Texas will be a base for AI chips. Currently, 270 Korean companies are investing in Texas in addition to Samsung, which will invest more than $40 billion in Taylor. Last month, Georgia Gov. Brian Kemp met with Korean conglomerates such as Hyundai Motor, Kia, LG Energy Solution and SK On. The state of Georgia has attracted 32 trillion won ($23.2 billion) in investments from Korean companies over the past decade. They know that “good jobs” are political assets.

Many regions in Southeast Asia, the Middle East and Europe are inviting Korean companies. A CEO of a large company, which moved its production base to Southeast Asia, said with a bitter face, “There is no reason to invest in Korea, which does not have attractive cost competitiveness, a regulatory environment or market size, other than ‘the mother factory.’”

Perhaps unaware of this atmosphere, some conglomerate unions are trapped in delusion. The day after the Texas governor visited Pyeongtaek, the National Samsung Electronics Union announced an “indefinite strike.” The employees who receive an average salary of 120 million won staged a general strike to “disrupt chip production” in return for a wage increase and incentive system reforms, which made headline news on foreign media. It garnered international attention because the strike took place while Samsung was waging a hard battle against Taiwanese, Japanese and American competitors.

What’s worse is the National Assembly. The majority Democratic Party (DP) recently adopted the Yellow Envelope Act — which restricts companies from claiming damages for union’s illegal strikes — as the party line. The Korean Metal Workers’ Union of the Korean Confederation of Trade Unions — the largest umbrella union in Korea — organized a general strike at some automobile factories last week, demanding the DP pass the act. It shows who really benefits from the act.

The party’s former chairman announced his re-bid for the leadership, saying, “Making a living was his core philosophy.” What did he mean by “making a living” without jobs in Korea? He also proposed a special law on semiconductors, but I’ve never heard the party worrying about the Samsung Electronics’ union’s strike.

An IT company executive clucked and said that venture capitalists looking for investment destinations to replace China are “passing” on Korea. In the first half of the year, 66.6 percent of the net purchase of foreign investors — which amounted to 15.3 trillion won — were concentrated on Samsung Electronics, SK Hynix and Hyundai Motor. The biggest market cap in Korea has been the same since 2000. Does Korea really have the ability to nurture new industries or companies? While selfish hardline unions and the populism of the large opposition prevail, the industrial sector will grow old and shrink faster than the country.