Creaking 'Gwangju-type Job Model'... "Told to Coexist, but Only Labor Leads the Blue House"

Labor "City only represents Hyundai's position"
Union "Requests beyond agreement, unilateral termination"

The Gwangju Global Motors automobile plant has been under construction since the groundbreaking ceremony in December last year, on a site of 604,000㎡ within the Gwangju Bitgreen National Industrial Complex, with a total building floor area of 109,000㎡. The construction progress rate is 9.5%.

[Asia Economy Reporters Kim Bo-kyung and Moon Chae-seok] On the 7th, at a company office located in Seo-gu, Gwangju, about 20 employees were busily engaged in their respective tasks. These are experienced employees hired as of the 2nd of last month. The company’s first open recruitment since its establishment six months ago attracted 358 applicants, reflecting strong local interest with a competition ratio of 16 to 1.

This company is Gwangju Global Motors, which is promoting the 'Gwangju-type Job,' the nation’s first labor-management win-win job model. The Gwangju-type Job, involving Gwangju City, Hyundai Motor Company, and labor groups, is a government-prioritized project, with President Moon Jae-in personally attending the investment agreement ceremony last January. The initiative aims to create jobs and revitalize the local economy through labor-management cooperation by reducing annual salaries to about half of those at large corporations. Amid the trend of production facilities moving overseas, this is a meaningful project to build the first domestic complete car factory in 23 years. To establish a factory producing 100,000 vehicles annually, over 30 institutions and organizations, including Gwangju City with 48.3 billion KRW, Hyundai Motor Company with 43.7 billion KRW, and Gwangju Bank with 26 billion KRW, have collectively invested.

However, on the 2nd, the labor sector, which played a key role in the Gwangju-type Job, declared the termination of the agreement, causing friction. The labor side claims that Gwangju City did not accept their demands during the project process and only represented Hyundai Motor’s position. On the other hand, the management side insists that the labor sector is making unreasonable demands, leading to a stalemate. While management intends to proceed with the project as planned, if the bitter disputes between labor and management continue, the original meaning of 'win-win' will be undermined, and other similar win-win job projects nationwide will inevitably be weakened.

Professor Kim Dong-won of Korea University’s Business Administration Department expressed concern, saying, "For win-win jobs to succeed, a business-friendly environment like Germany’s 'Auto 5000' must be created first, but the current Gwangju-type Job has become a completely different program. If Hyundai Motor fails, other companies will hesitate to participate in win-win job projects."

Currently, the labor sector demands ▲ the introduction of labor directors ▲ dismissal of unqualified and non-expert executives ▲ adjustment of executives’ salaries to within twice the employees’ wages ▲ cooperation among companies, subcontractors, and local communities ▲ and the formation of a citizen advisory committee. Park Sang-mo, former policy director of Kia Motors Gwangju Branch, raised his voice, saying, "Since the Gwangju-type Job is a national agenda of the Moon Jae-in administration, now the president and central government must step in." In response, Oh Soon-chul, head of management at Gwangju Global Motors, stated firmly, "They unilaterally declared termination by demanding things beyond the original labor-management agreement. We cannot operate the company against the shareholders’ will."

The Gwangju-type Job, requiring cooperation among labor, management, civil society, and government, is a path 'never traveled before.' Some trial and error seems inevitable in the process. However, amid concerns over an employment crisis caused by the novel coronavirus disease (COVID-19), creating good jobs through labor-management cooperation is more urgently needed than ever.