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[Editorial] Alabama Says Hyundai Motor Is a Savior

Posted May. 23, 2005 03:45,   


The welcoming and supportive response from the U.S state of Alabama over the completion of Hyundai Motor’s local plant compels us to think about the relations between the government, community, and businesses. The residents of Crenshaw County, where the plant was built, say, “The Sonata is a locally produced car, not a foreign one. We all have to drive Hyundai cars.” The residents are scrambling to become sponsors of the Korean staff, hold cultural festivals, and are even holding welcoming ceremonies at churches and schools. Alabama has set out to provide tax breaks of $252.8 million for Hyundai Motor and build its plant entrance. All this comes in return for creating over 2,000 jobs.

The Alabama state government has even adjusted the education and job training programs for Mercedes-Benz, Honda, and Hyundai, which all offered jobs to 40,000 local workers. The Washington Post reported in its article on the launch of the Hyundai auto plant that “Alabama sees these automakers as saviors.” While Hyundai Motor is at odds with a hostile labor union at home, some local sources report that the workers of the Alabama plant say they “do not need a labor union.”

The U.S. Big Three, Ford, GM, and Daimler Chrysler, are pressured into providing hourly wages of more than $20 by the UAW (United Auto Workers), whereas Hyundai Motor’s starting wage is $14.46 per hour. The Big Three have to pay $11 billion annually in pension and medical insurance for 800,000 retirees and their families. Losing competitiveness to high costs, the corporate bonds of GM and Ford have crashed to below-investment grade bonds, or junk bonds.

As sound and healthy work ethics have declined in Detroit, the former mecca for U.S. automotive industry, automakers are moving their facilities to the South where workers are more diligent. There are no nationalities or homelands for large companies competing in the global market. They seek places with decent work ethics and abundant incentives instead of regulation. Korean labor unions and the government must face this reality, rather than incessantly engaging in interventions of managerial control or regulation.

Chung Se-yung, who developed Hyundai Motor into what it is, passed away when the launching ceremony of Hyundai’s Alabama plant was taking place. We hope that the motor giant goes beyond what the late Chung had accomplished and succeeds in the U.S. market, surpassing Toyota, Honda, and Nissan.