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[Opinion] How to Overcome Recession

Posted September. 17, 2008 07:52,   


A Toyota car is jokingly called “Denso Inside” like Intel Inside, which refers to the Intel microprocessor in a PC. The strength of Toyota, the world’s car market leader, is supported by Denso, which provides 30 percent of parts for Toyota cars. The secret behind Denso, the world’s third-largest parts supplier with annual revenue of 25 trillion won, is the factory.

Denso is known for a 20-year-old female engineer stopping the assembly line. It stops when she tells her superior that a bolt seems defective because something feels wrong to her though it appears fine. This is possible because they trust each other. The principle of Denso is that the quality of a product should be seen not from the manual or a design, but from the perspective of a consumer. After its spin-off from Toyota in 1949, Denso has maintained trust between labor and management and avoided a strike for 59 years.

Few Korean CEOs would disagree that cooperation between labor and management in times of difficulty is crucial. Samsung Economic Research Institute asked 307 CEOs about a four-letter Chinese word they need to overcome economic downturn. They responded “啐啄同機,” meaning that a chicken can hatch out of an egg when both the hen and the chicken work together. Trust enables employees to share data and resources, enhancing productivity. Labor-management cooperation is not an option but a survival strategy.

Jang Hwan-cheol, a Korean automotive designer at Japan’s Mazda Motor, wrote in a letter to the editor carried by a Korean newspaper, “The difference between Korean and Japanese automakers lies not in technology but in trust.” He said he was shocked to see a newsletter from the Toyota union seven years ago. It was full of proposals such as "The development of new technology protects union members’ happiness, "Let’s volunteer to freeze our wages,” and “Let’s gather slogans to improve quality with prizes.” Jang said, “Japanese union members believe their company`s competitiveness is part of their own interest while their Korean counterparts seem to believe that they should get more from capitalists.” One way to survive a recession is to believe that employees can survive only when companies survive.

Editorial Writer Huh Mun-myeong (angelhuh@donga.com)