Hyundai Motor Union’s Refusal to Strike

The global car industry has been shaken up by the world economic crisis and Toyota Motor’s massive recalls. So Hyundai Motor of Korea is said to be a company that "turned crisis into opportunity." In the first quarter this year, Hyundai Motor’s sales revenue grew 40 percent year-on-year to 8.42 trillion won (7.59 billion U.S. dollars), with operating profits skyrocketing 357 percent to 702.7 billion won (633.35 million dollars) over the same period. Ordinary profit jumped 385 percent to 1.34 trillion won (1.21 billion dollars), while quarterly net profit soared 401 percent to 1.13 trillion won (1.02 billion dollars), breaking the company’s quarterly records. Hyundai Motor’s performance is considered nothing short of outstanding among major global automakers.

The carmaker has also sought to reduce the negative influence of its combative union. In December last year, labor and management agreed in collective bargaining on wages and other working conditions. In September last year, Lee Kyung-hoon, who championed moderate and practical reform instead of political struggle, was elected leader of the union. After visiting Detroit last month, Lee wrote in the union’s newspaper, “I was shocked beyond description after seeing the entire city of Detroit ruined by the closure of a General Motors plant. With no jobs available, the city’s population diminished and its buildings went into ruins. Korea’s automotive city of Ulsan must learn a lesson from such a hollowing out.”

Hyundai Motor’s unionized workers rejected a proposed general strike planned by their umbrella union, the Korean Metal Workers’ Union. In last week’s voting, an estimated 38 percent of union members voted in favor of a walkout, the first time for the approval rate to fall below 40 percent since the union’s inception in 1987.

The Hyundai union has a dishonorable record of going on strike every year since its founding, except in 1994 and 2008. The union went on strike 11 times in 2006 alone. The number of strike days was 362 days, resulting in production losses of more than 11 trillion won (9.91 billion dollars). Amid fierce global competition, a combative union will make it impossible for the company to remain competitive or ensure job security and welfare for its employees. So the members of the Hyundai Motor union have fortunately opened their eyes and started to distance themselves from militant labor struggle. Once out of the shackles of labor-management relations, Hyundai Motor could achieve what Samsung Electronics has achieved in the global electronics industry.

Editorial Writer Kwon Sun-hwal (shkwon@donga.com)