[Inside Chodong] Auto and Tire Industries Preparing for Strikes... Remember Ssangyong Motor

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] "The difference in stance between the company and the labor union is an issue, but it feels like the company union is moving in line with the nationwide general strike schedule of the Korean Confederation of Trade Unions (KCTU). I’m not sure if it’s right to strike according to the KCTU’s struggle schedule rather than the industry or company circumstances."

This is a lament from a representative of manufacturer A, which is currently preparing for a strike. The finished car and tire industries are on the brink of large-scale strikes. In particular, the strikes by the Hyundai Motor Union, the industry’s leading union, and the No. 1 union of Hankook Tire & Technology (Hankook Tire) will inevitably have a significant impact on other companies currently negotiating wage collective agreements. This is why there are concerns about a domino summer labor struggle (夏鬪, summer struggle in the labor movement).

Moreover, the KCTU, which has been opposing labor and corporate policies since the inauguration of the Yoon Suk-yeol administration, is fueling the general strike in the labor sector. On the 7th, they held a central committee meeting to approve the second half’s struggle plan and adopted a special resolution. They are planning simultaneous and widespread rallies by agenda in September and October this year. In November, they have scheduled a nationwide workers’ rally with 100,000 union members, and in December, a major parliamentary struggle to block ‘labor deterioration’ and achieve reform legislation.

The right to strike is a fundamental right of workers enshrined in the constitution. However, the ‘labor fundamental rights acquisition’ they claim must be based on justification and legitimacy first. Currently, the business environment for companies is more challenging than ever. Surrounded by the Russia-Ukraine war, a global semiconductor shortage, and the ‘three highs’ of high interest rates, high inflation, and high exchange rates, there is continuous uncertainty that makes it impossible to foresee even a step ahead.

While it is difficult enough to overcome the crisis by joining forces, the unions are claiming only their ‘rights’ without sharing the pain. We have experienced through the Ssangyong Motor incident that this inevitably leads to harm for everyone. In 2009, Ssangyong Motor, which entered court receivership, decided to lay off 2,646 workers, nearly 40% of the total workforce. At that time, the Ssangyong Motor union, affiliated with the KCTU Metal Workers’ Union, opposed this and occupied the Pyeongtaek plant for 77 days, resorting to violence. Public opinion turned against them, and eventually, the union, a symbol of militancy, withdrew from the Metal Workers’ Union. Since then, they have maintained 13 years of no-strike and no-dispute. They actively participated in self-help efforts such as wage cuts and unpaid leave. Recently, it is reported that they consulted with industry experts on ‘what role the union should play to save Ssangyong Motor.’ However, public perception of Ssangyong Motor remains cold. On internet communities, critical comments such as ‘The union should take over the company’ and ‘The company is failing because of the union’ still appear. The union’s efforts seem to have been overshadowed by the vivid memory of the union’s actions in 2009 among the public.

The job insecurity felt by unions due to the paradigm shift toward electrification, such as electric vehicles, is understandable. However, now is the time for labor and management to cooperate and overcome the crisis together. If the union chooses to strike, it will inevitably fall behind in competition, and only a vicious cycle of job losses due to worsening corporate management will be repeated. Global automobile companies are rushing to accelerate electrification. It is a war to seize the initiative. If domestic automobile companies’ growth is hindered by union opposition, the consequences will directly translate into national losses. In fact, it is expected that this year, the number of automobile exports from Korea will be surpassed by China for the first time. The situation is that serious.

If the strike materializes, the finished car and tire industries will be hit directly. They are already struggling with production difficulties due to the shortage of vehicle semiconductors, and if production disruptions caused by strikes are added, great confusion is inevitable. The damage will be borne entirely by consumers waiting for new cars. Consumers will clearly remember that the electrification trend of our automobile industry was delayed due to the strike and that they did not receive the vehicles they wanted on time. And this will last longer than the union expects.

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