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Korea’s major industries suffer from difficulties at home and abroad

Korea’s major industries suffer from difficulties at home and abroad

Posted July. 03, 2018 08:25,   

Updated July. 03, 2018 08:25


Domestic industries, such as car and shipbuilding that have traditionally served as key pillars of the Korean economy, are going through difficulties in and outside the country. They are suffering at home from reduced productivity and conflict between labor and management, while abroad, they are hit abroad by Trump’s trade war.

According to the auto industry, Hyundai Motor’s labor union voted to strike on Monday as the wage increase negotiation with the management, which has been going on since May, broke off. It would be the seventh strike in a row since 2012 if the labor union pushed ahead with strike this year.

Conflict between labor and management is intensifying as well in the Korean shipbuilding industry, which has been suffering from lack of orders. The labor union of Daewoo Shipbuilding & Marine Engineering last month decided to join the Korean Metal Workers’ Union and is voting to strike from Monday To Tuesday. Hyundai Heavy Industries has already filed for mediation last month with the National Labor Relations Commission as its labor union voted in favor of strike action in April. If the mediation is not successful, the workers will have the right to strike.

To make matters worse, the U.S. tariff scare is increasing at a time when the Korean auto industry is busy dealing with labor strikes. In an interview with Fox TV’s Sunday Morning Futures, President Trumps said, “We can talk steel, we talk everything. The big thing is cars,” stressing that his biggest weapon in the trade war is auto tariffs.

“It has been expected that the Korean car industry would be hit hard if the United States imposes high tariffs on imported cars,” said Lee Ji-man, a business administration professor at Yonsei University. “Although belated, we should deal with the situation through international cooperation and at the same time secure competitiveness by break out of the high-cost, low-profit structure.”

Hyoun-Soo Kim kimhs@donga.com · Yong Park parky@donga.com