Hyundai Motor, Kia, and Korea GM Labor Unions Joint Press Conference
Imported cars are waiting to be shipped at Pyeongtaek Port, as seen from a Seoul Metropolitan Police Agency helicopter on the 10th, one day before the Lunar New Year holiday./Photo by Jinhyung Kang aymsdream@
[Asia Economy Reporter Yoo Je-hoon] Labor unions of domestic automakers have demanded an extension of the retirement age to 65. This is based on the inevitability of adjusting the retirement age in line with the gradual increase in the National Pension eligibility age. However, as the global automotive industry is actively pursuing 'electrification,' which is changing the job paradigm, there are significant concerns that a simple extension of the retirement age could weaken corporate competitiveness.
According to the industry on the 3rd, the Hyundai Motor Branch, Kia Branch, and Korea GM Branch of the Korean Metal Workers' Union under the Korean Confederation of Trade Unions held a joint press conference in front of the National Assembly in Yeouido, Seoul, demanding legislation to extend the retirement age linked to the National Pension. Prior to this, the heads of the three unions had lunch with Lee Nak-yeon, leader of the Democratic Party of Korea.
The reason they are demanding an extension of the retirement age is the 'gap' between the retirement age and the period until receiving the National Pension. The unions of the three automakers stated, "At the very least, the extension of the retirement age linked to the National Pension eligibility age must be realized," and argued that "the issue of extending the retirement age is a social agenda that can no longer be postponed."
However, the reality faced by the automaker industry is not simple. The biggest issue is the paradigm shift toward 'electrification' in the global automotive industry. Electric vehicles (EVs), which each company is focusing on, typically require 30-40% fewer parts compared to conventional internal combustion engine vehicles because they do not need components such as engines and transmissions. Naturally, the workforce required for vehicle production also decreases, and if the retirement age is extended, the number of idle workers will inevitably increase without natural reduction.
Worldwide, labor, management, and government are already experiencing conflicts due to the advent of the electric vehicle era. According to Bloomberg News, the UK government is in a tug-of-war with Stellantis, which is trying to restructure automobile factories in line with the electrification trend, over support measures.
Related conflicts are also surfacing domestically. Hyundai Motor's first dedicated electric vehicle model, the Ioniq 5, has gained popularity by achieving 90% of its annual sales target within a day of pre-orders opening. However, at the production site, negotiations between labor and management over 'man-hours' (the number of workers involved in producing a car per hour) are being delayed. The Korea GM union, plagued by rumors of withdrawal, has been continuously demanding the allocation of electric vehicle production from headquarters for future survival.
Experts advise that since a simple extension of the retirement age is difficult to accept in corporate workplaces, the reallocation and retraining of idle workers due to electrification must be addressed first. Lee Hang-gu, a research fellow at the Korea Automotive Technology Institute, said, "As the paradigm of the automotive industry is rapidly shifting, extending the retirement age is a condition that is not easy for automakers to accept," adding, "The establishment of a retraining system suitable for digital transformation and the reassignment of personnel due to electrification are tasks that must be resolved first."
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