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[Editorial] Hyundai Labor Talks

Posted April. 28, 2006 06:57,   


After seriously weighing the punishment of Hyundai Kia Automotive Group Chairman Chung Mong-koo and Chung Eui-sun, the chairman’s son and the president of Kia Motors, the prosecution decided to seek an arrest warrant for the chairman and indict the president without detention. The prosecution reportedly had no other option because the chairman’s charges are grave.

Hyundai Automotive Group asked for leniency, saying that the chairman’s arrest will lead to leadership vacuum and decision-making disruption and therefore cause a crisis in management. It is true that the group, which has depended on a one-man management system, will be impacted. But the group should turn the crisis into an opportunity by attempting to innovate a transparent and efficient management system to survive as a 21st Century global business group. If the labor and management of the group join forces and begin acting for a breakthrough, people will hail such an effort.

It is hard to predict how the court will judge in the examination of the warrant because the chairman is old, nearly 70 years old, and a trial without detention is principle of the code of criminal procedure. As the prosecutors’ office obtained sufficient evidence through seizure and searches, the court could reach a different conclusion from the prosecution regarding concerns about fleeing and destruction of evidence.

With a large number of parts suppliers and employees, the automobile industry has a great influence on the economy. Korea’s auto industry produces more than 10 percent of the gross domestic product and hires 10.4 percent of the entire workforce, directly and indirectly. Hyundai Kia Motor accounts for 78 percent of the total production of the domestic auto industry and 40 percent of direct employment. This is why the survival of Hyundai Motors must not be threatened.

There is cutthroat competition in the global auto market. Some predict that Hyundai Motors, one of the world’s top seven automakers, would find it hard to survive unless it becomes one of the top five players. The price competitiveness of Korean cars in America has recently been compromised due to the strong won. Under these circumstances, it is desirable that the business community, parts manufacturers and even the labor union voice their concerns over Hyundai Motors. It is important to keep such an atmosphere. For Hyundai Motor’s survival, its labor and management should be united and restore public trust first. To this end, the company must establish a new paradigm of transparent management.

The court and the prosecution should have in mind the proposition, “We must revitalize the economy,” in its legal procedures from now on.