Korea’s Aging Manufacturing Industry

Mr. Jang Han-geun, 42, is regarded as the “aged last-born” at his workplace.

He has been working at Gyeongin Metal Industry, located in Geomdan-dong, Incheon, since 1995 when his colleagues started leaving the company because foundry work was considered to be a declining industry. In this regard, he is the last man standing for 11 years.

Last month, he happened to have a long-awaited junior in his mid-30s, who came to learn technology there.

“I was really glad to have a coworker my age. I tried to treat him in a warm-hearted manner, sitting next to him at lunchtime and sharing cigarettes with him to not make him feel lonely.

The new hire was gone just in four days, however. The newcomer quit the job because he couldn’t endure the coarse working environment and physical agony. Jang said, “this kind of thing has happened for 11 years” with a bitter smile.

Small- and medium-sized manufacturing industries in Korea are getting old. The graying phenomenon is rapidly moving on as young people avoid working at small- and medium-sized enterprises (SMEs). Graying manpower in domestic industry is not a problem in one company only. Not having new human resources will make production technology and know-how in industries dead, resulting in a crisis for Korean manufacturing businesses.

Are small companies turning into old folks’ homes?-

Seohan Antamine, a fire retardant manufacturing company located in Incheon Namdong Industrial Complex, is a solid small company whose revenues were 8.5 billion won (8.5 million dollars) last year. The company won a trophy for reaching the one million dollar export threshold and a certification of new technology mark. However, the company is, in fact, worrying about something other than the company performance. The reason is that a technology advisor who has core technology for fire retardant manufacturing is about to retire because he has turned 57, the retirement age.

The president of the company said, “20 out of a total of 30 employees are people whose ages are close to 50. Most young people can’t put up with the work environment more than one week.”

Three years ago, an auto parts manufacturing firm Changwon extended its retirement age from 55 to 58 because it had to keep its older workers after younger people stopped applying to work for the company.

However, the situation hasn’t changed for the past three years. The company has abolished the concept of retirement age in order to keep assembly workers who might otherwise have retired due to age.

Gloomy Future for Korean Manufacturing-

The problem is that the Korean manufacturing industry continues to lose its manufacturing skills as Korean society ages. Especially, fundamental sectors in manufacturing, such as casting, mold, and plating are more seriously affected because it takes four or five years to learn skills in those areas. The recent boom in various technology academies is not enough because hands-on experience is much more important than theory.

A senior researcher at the LG Economy Institute pointed out, “Those technologies are intermediary ones needed to make ships, automobiles, and mobile phones, the main export products of Korea. The obsolescence or transfer to China of those technologies would seriously affect the future of the Korean manufacturing industry.”

Chang-Won Kim Jae-Dong Yu changkim@donga.com jarrett@donga.com