[Editorial] A New Start for Hyundai Motor`s Union

The union of the country’s top automaker Hyundai Motor has elected a moderate reformist as its leader. The defeat of a hard-line candidate reflects the union’s resentment of its previous leadership’s habitual strikes and political struggles led by its umbrella labor organization, the Korea Confederation of Trade Unions. The Hyundai union has seized a rare opportunity to begin a new labor movement that will bring a win-win situation for both workers and management.

New union leader Lee Gyeong-hun said members chose stability over struggle. The first moderate to head the union in 15 years, Lee should focus on curing the union’s chronic disease of going on strike. Hyundai unionists, who went on strike for some 20 days in the first year after the union’s establishment, have done the same every year over the past 22 years except in 1994. In late 1991, a 35-day strike caused the suspension of the carmaker’s production lines. In 1993, another 35-day work stoppage over a wage dispute prompted the government to invoke its emergency power of mediation. Since the union’s establishment, Hyundai has suffered lost production of 1.1 million vehicles worth nearly 11.5 trillion won (9.7 billion U.S. dollars).

Hyundai cannot solidify its position as a world-class carmaker unless it cures itself of its union’s tendency to strike. The carmaker’s problems can hardly be found anywhere else in the world. In the wake of the unprecedented global financial crisis, automakers with greedy unions have gone down. A case in point is General Motors, which was once the world’s No. 1 carmaker but fell into bankruptcy after rejecting restructuring and providing medical insurance for retirees and their families. Hyundai’s union was once considered more militant than GM’s. In contrast, Toyota Motor of Japan has a union that never goes on strike. This has allowed the company to implement stringent restructuring even becoming the world’s top carmaker.

Hyundai deserves applause for its strong performance despite the global economic crisis and fierce competition. The carmaker, however, also significantly benefited from a weaker Korean currency that made its cars cheaper abroad and the financial woes of major global carmakers. Because of these factors, there is no way that Hyundai can be said to have solidified its competitive advantage.

The Hyundai union needs to end its relationship with its umbrella organizations, the Korean Metal Workers’ Union and the confederation. New union leader Lee has interpreted his election as workers’ demand to reform the metal workers’ union, which ignores the plight of workers to protect job security. True reform will be to break free from the restraints of the confederation, whose obsession with excessive political and militant struggles has lost it public support. The new leader of the Hyundai union is hoped to open a new path in Korea’s labor culture.