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[Editorial] Ssangyong Motor Turning Profit Thanks to Worker Switchover System

[Editorial] Ssangyong Motor Turning Profit Thanks to Worker Switchover System

Posted May. 14, 2007 07:45,   


Ssangyong Motor’s sales revenue in the first quarter of 2007 rose 14.9 percent compared to the same period in 2006. The company also posted a net profit of 9.3 billion won, reversing a deficit during the previous quarter. All this was due to management and labor’s concerted efforts to enhance competitiveness.

The firm initially improved productivity by redistributing its assembly lines. Ssangyong then boosted sales to China, enabling its net profits to record a surplus in the first quarter of this year.

Some employees at Ssangyong did not work, but were just trained for a year. This was because its core product, SUV models, were overstocked and their production was halted. Its labor union, which was concerned about restructuring, went on a strike for a month as a result. The labor union, however, settled with management over the introduction of a worker switchover deployment system and stable employment security. Accordingly, workers from not-so-busy lines worked at busy lines starting this January to enhance their production efficiency.

Hyundai Motor Company has not been able to introduce a similar worker turnover deployment system. The company’s labor union objected to the system because it allegedly aggravated labor intensity. For this reason, some assembly lines that are manufacturing popular vehicle models are short of workers, while other assembly lines that have piled-up inventories are being trained. Ironically, this is what takes place at the Hyundai Motor with the aim of making it the world’s fifth largest automobile maker as global leading car companies are locked in fierce competition for productivity.

Korea’s automobile production is estimated at four million units within the nation and 1.25 million units abroad, totaling more than five million units in 2007. The output carries all the more significance considering difficulties including higher oil prices, sluggish domestic demand, and anxiety concerning management and labor relations. However, Korea should not be comfortable where it is. The nation’s automobile industry, a growth engine behind Korea’s economic growth, should tackle tasks like inventing eco-friendly vehicles and enhancing competitiveness for parts development. If not, the outlook for the future will never be rosy.

Toyota Motor Corporation ranked first in world market share in the first quarter of this year, passing General Motors. This results from the firm’s production methods that maximized efficiency, and differentiated sales methods, as well as from management and labor’s emphasis on sense of crisis. In contrast, GM, which has put emphasis on benefits requested by its labor force, issued a report stating, “We are not sure whether we can stay in first place in terms of world market share.” Will Korea’s automobile industry, operating in an age of five million units of production per year, follow Toyota’s path, or GM’s?