Forum Focuses on Hyundai Management

“Labor unions of Hyundai Motor are staging their protest against the campaign aimed at helping Chairman Chung Mong-koo. Watching them raising objection, I realized that the already sour labor-management relationship at the company is turning into an even more confrontational one. The situation in Hyundai is very similar with that in GM, which is on a downward spiral. If those at Hyundai fail to do something about its present situation, every Hyundai stakeholder will be dragged into a huge failure.” (Kim Dae-mo, professor of economics, Chung-Ang University)

“Hyundai management has something to hide, a fatal flaw labor unions can take advantage of. As things stand, the company cannot grow to fulfill its potential.” (Seo Kyung-seok, secretary general of Citizens for a Better Society)

“Traditionally, Koreans find it so hard to say ‘no’ to their bosses. This is one of the indirect causes of the scandal at Hyundai.” (Kwon Young-joon, professor at College of Management and International Relations, Kyung Hee University)

On June 23, Citizens for a Better Society, a civic group led by Park Se-il, Lee Myeong-hyun and Lee Seok-yeon, hosted a forum under the title, “Hyundai Motor and its Future” at the Korea Press Center in Seoul. Around 200 participants, including professors and experts in the automotive industry, attended the forum.

The discussion lasted for three hours where participants agreed that it is urgent for Hyundai to improve its management system and labor-management relations to overcome the crisis.

Among the participants, Professor Kwon warned, “Years ago, negligence in safety checks eventually led to the collapse of the Seongsu Bridge over the Han River. If Hyundai wants to avoid a similar unfortunate event caused by negligence, it should strengthen the mechanism for checks and balances in its management. To do this, it should make the selection process of independent board members more transparent, and get a better management monitoring structure up and running.”

He also pointed to the important role of the regulatory authorities, saying, “Both the Fair Trade Commission and the Financial Supervisory Commission must live up to their stated responsibilities by proactively taking supervisory actions against any potential large-scale scandals.”

Some among the forum attendees urged both workers and top executives to more actively engage in dialogue.

On the matter of dialogue, Professor Kim remarked, “Hyundai’s union members posted their writings on the website of Citizens for a Better Society, to which management replied. After reading their reply, I came to have a better understanding of the overall situation of the company. I don’t think it’s reasonable that Hyundai’s labor and management are talking to each other over the website of the civic group, instead of being in face-to-face consultations.”

Meanwhile, Lee Mun-ho, director of the Korean Institute for Innovative Work Policies, encouraged both sides of the auto manufacturer to try to find solutions to seemingly trivial matters as well as significant ones. He said, “Unionized workers and top executives view each other as no more than parties to a negotiation. Workers push forward with their list of demands while executives try to gain as many concessions as possible in return.”

He gave his advice to the auto company, saying, “At this year’s World Cup, a scene of a Togo soccer player giving a foot massage to a Korean player touched the hearts of so many Koreans. Similarly heart-moving gestures are what are needed between Hyundai’s labor and management. It’s not entirely about dramatic changes in the policies and frameworks. In baseball, sometimes they play ‘small ball,’ preferring base hits or bunts. Those at Hyundai need a ‘small ball’ leadership.”

The forum was wrapped up with the announcement of a statement by Citizens for a Better Society, in which the participants urged Hyundai to establish a more systematic management; to hand over the corporate chairmanship only to the successor whose management skills have been sufficiently proven; and to demonstrate its will toward greater corporate transparency by hiring a whole new group of outside board members.

One of the suggestions raised during the forum was to channel the one trillion won Chairman Chung pledged to spend for the public good into R&D. This proposal was made based on the simple principle: If a person accumulated personal wealth with the money that should have gone to the company, the wealth should be duly returned to the company.

Representatives from Hyundai management asked labor unions to make mutual efforts for cooperation and refrain from unreasonable demands for wage increases and annual strikes.

In addition, they made an appeal to the authorities for the release of Chairman Chung for the sake of the company.

In their appeal, they did not forget to emphasize the necessity for efforts on their part to renew themselves. They stated, “Unless we at Hyundai do not change and reform ourselves, our emphasis on the management crisis and campaign for Chairman Chung will leave more Koreans disappointed. Every one of us must make painstaking efforts to reform and renew ourselves and turn the crisis into an opportunity.”

Citizens for a Better Society is a civic organization launched in April of this year by about 2,000 leaders from every corner of Korean society. It aims to help the country achieve a per capita income of $30,000 and help liberal and democratic values take deeper roots.

In March of this year, Secretary General Seo led a rally in front of Hyundai’s Ulsan plant in order to urge the workers to accept a freeze on wages for the next few years as a way of sharing burdens and enhancing competitiveness.

Hyo-Lim Son aryssong@donga.com