Automobile Industry Association "Welcome GGM Completion... Hope It Becomes a Model Case for Labor-Management"

"GGM Compact SUV Production Expected to Play Positive Role in Sluggish Kei Car Market"

[Image source=Yonhap News]

[Asia Economy Reporter Yu Je-hoon] The Korea Automobile Manufacturers Association (KAMA) expressed hope that Gwangju Global Motors (GGM) will become a model case for establishing industrial peace between labor and management.

On the afternoon of the 29th, KAMA issued a statement saying, "We actively welcome the completion of GGM." GGM is an automobile manufacturing joint venture established through joint investment by Gwangju Metropolitan City (21%) and Hyundai Motor Company (19%), and it is the first newly established automobile factory in Korea in 23 years.

KAMA evaluated GGM, a product of the 'win-win regional job creation' policy, by stating, "It is very meaningful that a new automobile factory has been established in Korea after 23 years based on labor-management cooperation, maintaining appropriate wages (average annual salary of about 35 million KRW) and appropriate working hours (44 hours per week) agreed upon by labor and management, thereby resolving high wages and unstable labor relations."

KAMA expects that mass production of compact SUV models through GGM could have a positive effect on domestic compact car sales, which have continuously declined since 2012. The decline from about 203,000 units in 2012 to about 97,000 units last year is mainly attributed to loss of price competitiveness due to high production costs and reduced investment and production caused by low profitability.

KAMA forecasts that with GGM's completion and compact SUV production, companies will reduce the burden of costs and profitability deterioration, while consumers will be provided with cost-effective vehicles, helping to revitalize the domestic compact car market.

Jung Man-ki, Chairman of KAMA, stated, "We hope that GGM's operation will contribute not only to the regional balanced development of the automobile industry but also serve as a model case for improving the chronic high-cost, low-efficiency structure and establishing industrial peace between labor and management." He emphasized, "The government should not hesitate to support market revitalization, including extending and expanding the sunset of compact car acquisition tax and fuel tax scheduled to expire at the end of this year, and providing purchase subsidies for compact cars to small self-employed business owners."

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