Core of Competitiveness and Job Creation
[Asia Economy Reporter Ki-min Lee] As the transition to future vehicles emerges as the core issue in this year’s wage and collective bargaining negotiations between labor and management in the completed vehicle sector, both industry and labor groups have united in calling for the National Assembly to step in to secure competitiveness. While both sides of labor and management are polarized over whether future vehicle transition investments should be domestic or overseas, and whether jobs will be reduced or preserved, they share the recognition that proactive political measures are necessary for industrial development and securing quality jobs.
The Korea Automobile Manufacturers Association (KAMA), together with the Korea Automobile Industry Cooperative Association (KAICA), the Korean Metal Workers’ Union, and the Federation of Korean Metal Workers’ Unions, submitted a joint petition on the 12th requesting the National Assembly’s support for sustainable development and the maintenance and creation of jobs through efficient support for the automobile industry’s transition to future vehicles.
This stands in some contrast to the situation where domestic completed vehicle labor and management, including Hyundai Motor Group, Korea GM, and Renault Samsung Motors, are showing differences in positions over future vehicle investments and jobs, pushing to the brink of strikes. The Hyundai Motor Union, which approved a strike vote in response to Hyundai Motor Group’s announcement of a $7.4 billion (8.4 trillion KRW) investment in the United States, opposed it by stating that “discussions about overseas factories should come only after concluding a special future agreement based on prioritizing investment in domestic factories for new future businesses.” The unions of Korea GM and Renault Samsung Motors are also in conflict with management, demanding extensions of retirement age, future vehicle development plans, and allocations of eco-friendly new vehicles.
Despite the tense standoff between labor and management in the completed vehicle sector, their unified voice to the National Assembly reflects an awareness that the transition to future vehicles is an urgent issue for the domestic completed vehicle industry. In particular, 83% of parts companies are small-scale businesses with sales under 10 billion KRW, and their average operating profit margin last year was only -0.5%, indicating weak competitiveness. KAMA explained that these companies hesitate to invest heavily in the future vehicle transition due to a lack of financial capacity.
Accordingly, these organizations proposed △financial support for parts companies’ future vehicle transition investments △training and employment support for future vehicle workforce △balanced development support for the domestic automobile industry ecosystem △extension and expansion of tax support for hybrid vehicles △inclusion of future vehicle-related technologies in ‘national strategic technologies.’
They particularly emphasized the need for National Assembly-level support and cooperation to ensure that the low-interest loan program announced last month by the government as the ‘Automobile Parts Companies Future Vehicle Transition Support Strategy’ is reflected in next year’s budget and can be implemented immediately. They also stressed the urgent need to allocate budgets for education and training systems in areas such as electronic parts control and autonomous driving software to respond to changes in workforce demand due to the future vehicle transition, as well as retraining programs for workers in sectors where demand is decreasing.
The four organizations participating in this joint petition stated, “We will strengthen win-win cooperation between completed vehicle manufacturers and parts suppliers, establish future-oriented labor-management relations, and ensure that our automobile industry secures global competitiveness, maintains and creates quality jobs, and that labor and management cooperate to jointly respond in the era of carbon neutrality and digital green transition.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
