Hyundai Motor Union: "Liquidity Crisis Due to COVID-19... Company Should Withdraw from Gwangju-type Jobs"

On the morning of the 2nd, Lee Yong-seop, Mayor of Gwangju Metropolitan City, announced an appeal from Gwangju City regarding the Korea Federation of Trade Unions' notice to cancel the Gwangju-type job agreement at the briefing room on the 5th floor of the city hall. Photo by Gwangju Metropolitan City

[Asia Economy Reporter Kiho Sung] The Hyundai Motor Labor Union has demanded that "Hyundai Motor withdraw from the Gwangju-type job investment," which is facing an all-stop crisis. Following the recent declaration of 'agreement termination' by the Korean Confederation of Trade Unions Gwangju Regional Headquarters, one of the pillars of this project, and the cold response to the request for business resumption from Gwangju City, the largest shareholder of Gwangju Global Motors (GGM), concerns are rising that the project itself might collapse.

On the 21st, the Hyundai Motor Labor Union stated through a newsletter, "In the midst of the liquidity crisis caused by the novel coronavirus infection (COVID-19), ineffective investment expansion should not be made."

The Gwangju-type job project aims to create 'win-win labor-management jobs' by maintaining appropriate wages at about half the level of existing completed vehicle manufacturers' wages, while the government and local governments support workers with various welfare costs such as housing and childcare to cover the relatively low wage gap.

Accordingly, Gwangju City and Hyundai Motor plan to invest a total of 700 billion KRW, including 280 billion KRW in equity capital and 420 billion KRW in borrowings, on a 620,800㎡ site in the Bitgreen Industrial Complex in Gwangju, aiming to mass-produce 100,000 units annually of sub-1000cc compact sports utility vehicles (SUVs). The job creation from this is estimated to be about 1,000 regular employees, including new production workers and experienced management staff, and 10,000 to 12,000 including indirect employment.

The Hyundai Motor Labor Union clearly stated, "There is no profitability in producing compact cars, and there are limits to market acquisition, and it will lower the quality of labor by mass-producing a low-wage structure," and argued, "It is better for Hyundai Motor to withdraw its investment plan at this time."

They added, "Especially as overseas factories are shutting down one after another and credit rating agencies are warning of Hyundai Motor's liquidity crisis, investing in the wrong place makes even less sense," and insisted, "The Gwangju-type job project can never succeed."

Meanwhile, the GGM plant is currently under construction, with plans to install production equipment starting this September, begin trial production in the first half of next year, and start mass production of completed vehicles from September.

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