Also... Car Jobs Held Hostage Ahead of General Election

Government Support Demand: 2018 GM 'Dejavu'

[Asia Economy Reporter Kiho Sung] Concerns are rising that the meeting between Jos? Vicente de los Mozos, Vice Chairman and Chief Manufacturing Officer of France's Renault Group, and Busan Mayor Oh Keo-don could follow the precedent set by foreign automobile companies that have issued so-called 'job invoices.' The meeting between Vice Chairman de los Mozos and Mayor Oh was arranged abruptly at the request of Busan City. However, with the general election approaching this year, there is concern that if the political sphere becomes overly involved in corporate labor issues, pressure for support from foreign automobile companies could intensify.

According to industry sources on the 30th, Vice Chairman de los Mozos visited the Busan plant the previous day to inspect the production line and held a meeting with executives and employees, including on-site managers. At the meeting, he pointed out that the strike rate at the Busan plant exceeds that of other plants by more than five times and emphasized the need to secure production competitiveness. Vice Chairman de los Mozos did not give a definitive answer regarding the allocation of XM3 export volumes during the meeting. Renault Samsung Motors urgently needs to secure XM3 export volumes as the consignment production of the Nissan Rogue will end starting in March.

Additionally, it is reported that during a private meeting with Mayor Oh in the afternoon, Vice Chairman de los Mozos requested support from Busan City, including tax benefits. However, he did not request support conditioned on the allocation of new car volumes. Nevertheless, with the general election scheduled for April, if the Busan plant faces difficulties, it is expected to significantly influence local voter sentiment, making it difficult for the political sphere to simply ignore Renault's requests.

On the 16th, Pawan Goenka, Chairman of Mahindra, who visited Korea, directly requested investment support from the government. Chairman Goenka met with Moon Sung-hyun, Chairman of the Presidential Committee on Economic, Social and Labor Affairs, and Lee Mok-hee, Vice Chairman of the Job Committee, expressing his commitment to job stability. He also conveyed to the Korea Development Bank the need for additional loans and extensions of existing loan maturities.

This behavior by foreign automobile companies recalls GM's actions in 2018. That year, GM executives visited Korea multiple times seeking government cooperation. Ahead of the June local elections, in mid-February, GM revealed plans to close the Gunsan plant, and in March, hinted at the possibility of bankruptcy filing. In April, they mentioned a restructuring deadline, which ultimately led the government to provide 810 billion won in public funds on the condition that GM maintain its plants in Korea for ten years.

Coincidentally, the current actions of the foreign automobile companies coincide with GM's moves 'three months before the election.' Even if government support is provided, it remains uncertain whether jobs will be preserved.

An industry insider commented, "As the general election approaches, external pressure from the political sphere and local governments regarding corporate labor issues is likely to intensify. If the political sphere becomes excessively involved in corporate labor matters, it could backfire as a burden on the government or local authorities after the election."

This content was produced with the assistance of AI translation services.