Hyundai union under pressure to join Gwangju plant plan


The government and lawmakers on Tuesday ramped up pressure on workers of Hyundai Motor to join a plan to build the automaker’s new plant in Gwangju as part of efforts to create new jobs and breathe new life into the local economy.

Prime Minister Lee Nak-yeon urged the automaker and its unionized workers to join the Gwangju city government’s drive to build a manufacturing plant and create 12,000 new jobs, calling it an innovative project for the labor market.

The plan mainly involves hiring more workers at half the wage Hyundai’s workers currently receive, with the Gwangju government providing incentives and subsidies to the workers.

Unionized workers at Hyundai’s plants in Ulsan, Asan in South Chungcheong Province and Jeonju in North Jeolla Province have opposed the plan, citing fears it would lower the level of their average pay.

Unionized workers at Hyundai Motor protest against a plan to build a manufacturing factory in Gwangju, saying that it would affect to their salaries, in front of the union office in Ulsan on Nov. 6. (Yonhap)

“The plan of building an automotive manufacturing plant in Gwangju and creating new jobs while keeping the labor cost low is the result of the four-year discussion among the labor, company, citizens and the government, and expectations from the government and politics are also high (for this plan),” said Lee, while presiding over a Cabinet meeting in Seoul.

“The Gwangju-type job project should succeed without fail. … I ask the workers at Hyundai Motor to cooperate by (having) a broader point of view in consideration of underprivileged workers, the slowing job market and the struggling auto industry.”

Floor leader Rep. Hong Young-pyo of the ruling Democratic Party of Korea also vowed to inject investments into infrastructure to support workers of the Gwangju job creation scheme.

“If the negotiation reaches agreement, the Democratic Party and the central government will provide support needed for Gwangju-type jobs, such as public housing and convenience facilities,” he said.

The remarks came a day after Gwangju Mayor Lee Yong-sup met with Hyundai Motor President Chung Jin-haeng in Seoul for negotiations. The two sides are likely to finalize the matter by Thursday before a parliamentary subcommittee starts review of the national budget.

Since June, the carmaker has been working with Gwangju on the project. Changing conditions attached to the deal set by the city have extended the negotiations, according to the company.

Separately, the Gwangju city government has been negotiating with the Korean Confederation of Trade Unions, one of the two major umbrella unions, on issues including the demand to raise the wage level for workers in Gwangju, and a condition that wage renegotiations be suspended for the first five years.

Hyundai plans to manufacture compact sport utility vehicles with engines less than 1,000 cubic centimeters, but Gwangju has demanded the carmaker produce electric vehicles instead, seeing that as a way of keeping the joint project viable.

“Since the company submitted an intent for investment in June, a new plan came afterward under pressure from local workers. As there have been changes, it might take some time for the company to consider,” said an official at the company.

Citing limited time for resources needed for the Gwangju jobs plan to be reflected in next year’s budget, the prime minister said the government will introduce measures to revive the nation’s auto industry, including support for fuel cell electric vehicles. The government submitted next year’s budget bill to the National Assembly on Nov. 5.

“I ask again for the management and the labor union of Hyundai Motor to exercise concession and compromise.”

Hyundai has been grappling with strong opposition from unionized workers who have threatened to stage sit-in protests if the carmaker joins the project. The carmaker has also been facing concerns over its consideration of having more plants at a time when the industry is suffering from slowing demand.

The Gwangju plant plan is not a money-losing project for Hyundai but a chance to diversify its production lineup, said Kwon Soon-woo, an auto analyst at SK Securities.

“It is nearly impossible to produce (low-cost) compact cars domestically with high labor cost already allocated as fixed cost,” he said. “If Hyundai builds a new plant, the company could utilize vendors within the Kia Motors production line in Gwangju as well. (Therefore) the plan won’t cost the carmaker much more than expected,” he said.


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