Changing Labor Relations at Hyundai Motor Company Amid Future Cars and COVID-19

Launch of Hyundai Motor Labor-Management Employment Stability Committee Phase 2... Appointment of 7 External Advisory Members
New Union Forms TFT to Respond to Future Car Industry Changes

Hyundai Motor Ulsan Plant (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Hyundai Motor Company's labor and management have presented retraining as a key response measure to future changes in employment structure. Unlike last year, when employment reduction due to the paradigm shift in the automotive industry was the main issue, this year, with the heightened sense of crisis caused by the COVID-19 pandemic, the focus is interpreted as prioritizing 'retraining' to prepare for the reduction of jobs. This marks a change from their previous hardline stance, which prioritized wage increases above all else.

According to industry sources on the 19th, Hyundai Motor's labor and management held the inauguration ceremony for the 2nd Employment Stability Committee at Hyundai Motor's Ulsan plant. Eleven representatives from labor and management, including Hyundai Motor President Ha Eon-tae and Lee Sang-soo, head of the Hyundai Motor branch of the Metal Workers' Union, attended the event. At the inauguration, seven external advisory experts, including Lee Hang-gu, senior research fellow at the Korea Institute for Industrial Economics & Trade, and Baek Seung-ryeol, CEO of Ergonomics, were appointed as external advisory members. The launch of the 2nd Employment Stability Committee was originally scheduled for early this year but was delayed due to the impact of COVID-19.

The Employment Stability Committee was first launched in January last year with the purpose of labor and management collaborating proactively to respond to future employment changes in the era of the Fourth Industrial Revolution. The 1st committee held monthly plenary meetings to discuss changes in the employment environment and countermeasures related to the automotive industry's transition from internal combustion engines to electric vehicles. At that time, external advisory members composed of private experts analyzed that due to changes in automotive production technology, about 20% of Hyundai Motor's manufacturing workforce would inevitably be reduced by 2025. Consequently, both labor and management reached a partial consensus on workforce reduction through natural attrition and the necessity of redeployment and retraining to prepare for this, concluding the committee's activities in October last year.

This year, the Employment Stability Committee plans to engage in more detailed discussions on how to conduct workforce adjustments and implement employee retraining in response to changes in the employment environment. An official who served as an advisory member said, "During last year's Employment Stability Committee discussions, there were claims that new businesses related to future vehicles, including batteries, motors, and core components of autonomous vehicles, need to be internalized," adding, "In the long term, more detailed exchanges of opinions will take place regarding methods such as redeploying existing manufacturing personnel to the future vehicle sector through retraining." It is unusual that the labor union has officially recognized the need for retraining its members and placed it on the agenda for labor-management consultations.

The labor union's shift from a hardline stance is due to the combined impact of industrial transformation, including electric and autonomous vehicles, and the real economy shock from COVID-19, which has heightened the sense of crisis across the automotive industry. Last month, the union mentioned in its newsletter that it should consider freezing wages in reflection of the industry's crisis awareness due to COVID-19, which appears to be an extension of this movement. This is the first time the Hyundai Motor labor union has mentioned a 'wage freeze.' Until now, the union had never backed down from demands for wage increases, regardless of the company's management difficulties.

After agreeing that some workforce reductions are inevitable in line with industrial transformation such as electric and autonomous vehicles, the union has also formed a separate task force team (TFT) under the union leadership to systematically respond to industrial changes, marking another change. The new Hyundai Motor union leadership, launched in January this year, established the 'Future Change Response TFT' and began reviewing comprehensive issues related to changes in the automotive industry in the era of the Fourth Industrial Revolution, including electrification and autonomous driving. In preparation for this employment committee activity, seven internal advisory members composed of former branch heads and thirteen internal policy advisory members were newly formed.

The business community is paying attention to the fact that the Hyundai Motor labor union, which had been persistently confrontational, is now focusing on overcoming the crisis during the COVID-19 situation. A business official said, "Hyundai Motor is showing a smooth labor-management agreement even at times when shutdowns are necessary due to parts supply and export volume issues," adding, "The union's atmosphere, which had been all about saying 'No,' is changing during the COVID-19 crisis, and we hope this leads to the advancement of a progressive labor-management relationship."

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