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[Editorial] Hyundai Motor Union Digging Own Grave

Posted December. 25, 2008 06:43,   


The world’s largest carmaker Toyota has introduced large-scale restructuring measures while freezing facility investment and laying off non-regular workers to cut costs. The company adopted such measures since its operating deficit this fiscal year is estimated at 150 billion yen (1.6 billion U.S. dollars), a record high for Toyota. Toyota President Katsuaki Watanabe has resigned to assume responsibility, saying, “The pace, depth and scope of the global economic slowdown are faster than expected. I cannot fathom when the bottom of the recent economic difficulties will come.”

Hyundai Motor has declared “emergency management” under which it has frozen wages for senior workers, reduced operation at several factories, and changed the work system. These measures seem much weaker than those of Toyota, a carmaker with the latest technology that posted record net profit for eight straight years from 2000 to last year. Nevertheless, Hyundai’s union calls the measures “an attempt to challenge the union,” adding. “We will never let management execute these measures.” Given that the three largest U.S. carmakers are near collapse and European and Japanese counterparts are cutting production, the attitude of the Hyundai union is really discouraging.

The Hyundai Kia Automotive Group is expected to sell 4.2 million vehicles this year, 600,000 less than its initial goal. Worse, a whopping 1.06 million vehicles that usually sell over four months have remained unsold. It seems hard for the carmaker to show a good performance next year. Why can’t Hyundai’s union learn lessons from the Big Three, which have long engaged in reckless management and are now begging for the government’s help? Ssangyong Motor has fared no better. Due to sluggish sales, it has suspended operations at its factory and even delayed paying its workers. Worse, its largest Chinese shareholder is threatening to withdraw its investment.

Fortunately, though, senior workers at Hyundai’s Ulsan factory will participate in the company’s efforts to overcome the crisis, and have urged other workers to join forces. This is considered a ray of hope for Hyundai. Korean car exports and domestic demand have fallen due to the global economic crisis. The chronic militancy of the Hyundai union will ultimately lead to the company’s destruction.