Korea's Car Unions Voice Annual Worker Demands

It must be August, for South Korea's unions are beginning to make their annual demands.

This year the union of Hyundai Motor Co. is demanding a voice in decisions on the ever-increasing expansion and construction of new overseas plants.

For the union at Kia Motors, workers are pushing for seats at board meetings, and a personnel committee composed of the same number of members from the two sides.

Kia's union has also objected the firm's family management especially with the appointment of Chung Eui-sun as CEO earlier this year. Chung Eui-sun is the only son of Hyundai-Kia Automotive Group chairman Chung Mong-koo.
What might be a surprise is that this year wage increases are not the top priority.

Why?
Unions are aware that an ever-increasing share of Hyundai and Kia revenue is from overseas sales. Moreover, the unions are sensitive to Korea'?s flat domestic car market, a strong Won, and higher costs.

Chosun IL Bo reports that labor unions wouldn't call for exorbitant wage increases because they know about their company's current financial status.

As for having a role in company management, labor union officials cite that if they can participate in the company decision-making process, it will enhance management's responsibility and lead to labor's increased responsibility.

Oh Kil-sung, vice president of the Korean Confederation of Trade Unions, said, "There are many expected benefits of labor's participation in decision making process. Transparency will be improved and pocketed money will gradually disappear. And management and labor will share their responsibilities together."

But what is actually driving the unions quest for a role in management?

I see the real issue as an increased fear of job insecurity.

Confirming this fear is a statement by Park Seong-joon, chief researcher at the Korea Economic Research Institute. Park notes, "Decisions about overseas investments and personnel replacements are part of the management's exclusive rights, and apparently, job security is the foremost reason why unions want to participate in management."