Automotive Labor and Management Unite: "Domestic Production Promotion Tax Should Include Electric Vehicles"

Joint Statement by the Metal Workers' Union, Metal Federation, Automobile Association, and Automobile Parts Cooperative

Automotive labor and management have reached a consensus on the need to introduce a domestic production promotion tax system in order to secure a domestic manufacturing base and prevent the hollowing out of the automotive industry in South Korea.

On April 23, four organizations—the Korean Metal Workers' Union, the Korean Metal Workers' Federation, the Korea Automobile Mobility Industry Association, and the Korea Automobile Industry Cooperative—issued a joint labor-management statement at the Korea Automobile Center, strongly urging the government and the National Assembly to introduce a domestic production promotion tax system. Present at the event were Daejin Jeong, President of the Mobility Industry Association; Taekseong Lee, Chairman of the Automobile Cooperative; Byungchul Kim, Vice Chairman of the Metal Workers' Union; and Jaeseong Jang, Vice Chairman of the Metal Federation.

From the left, Taeksung Lee, Chairman of the Automobile Cooperative, Daejin Jung, President of the Mobility Industry Association, Byungcheol Kim, Vice Chairman of the Metal Workers' Union, Jaesung Jang, Vice Chairman of the Metal Federation. Mobility Industry Association

In the statement, they emphasized, "The Korean automotive industry is a key national industry, accounting for 14.1% of domestic manufacturing shipments, providing direct and indirect employment to 1.56 million people, and generating annual exports of $93.1 billion." They further noted, "It supports an extensive industrial ecosystem, including materials, parts, batteries, semiconductors, software, and AI."

They continued, "Major competing countries such as the United States, Japan, and Europe (EU) are reinforcing their own production bases through various policies, including tax benefits and tariffs." They expressed concern that "if Korea fails to respond in a timely manner, the weakening of the domestic production base and the hollowing out of the industry could become a reality."

Accordingly, they proposed that the scope of the domestic production promotion tax system should include future vehicle sectors such as electric vehicles. If this tax system is implemented, they expect it will lead to increased domestic electric vehicle production, improved factory utilization rates, and greater use of domestically produced parts. They also anticipate it will facilitate the transition of the parts industry to future vehicles, help stabilize employment, and revitalize regional economies, thus having a broadly positive impact across the industry.

Byungchul Kim, Vice Chairman of the Metal Workers' Union, stated, "In the face of a global crisis, labor and management have united their voices out of a sense of duty to protect the domestic industrial ecosystem and quality jobs."

Jaeseong Jang, Vice Chairman of the Metal Federation, remarked, "At a time when the automotive industry is undergoing a rapid transition to future vehicles, the government must actively support domestic factories through tax incentives to ensure a just transition and employment stability for workers at small and medium-sized parts suppliers."

Taekseong Lee, Chairman of the Cooperative, stressed, "The weakening of the domestic production base could lead to instability across the entire parts industry ecosystem and job losses. Therefore, securing the production base is essential for supply chain stability and the sustainable transformation of the industrial ecosystem."

Daejin Jeong, President of the Association, stated, "With the shared goal of making Korea a powerhouse in future vehicles and safeguarding the domestic automotive industry ecosystem, labor and management will work together. We urge the government and the National Assembly to make decisive policy decisions."

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