Subscribe
E-Paper
Major automaker sets precedent for pandemic-stricken industry
Union leaders and management at Korea's largest carmaker, Hyundai Motor, agreed Monday to freeze wages for this year. Members of the union have yet to vote to agree to this, the third wage freeze following ones during the 1998 Asian currency and the 2009 global financial crises. They also reached the agreement in just 40 days, compared with the three to eight months in the past. The swift decision reflects a sense of crisis gripping the carmaker. Amid the severe consumption slump worldwide caused by the COVID-19 pandemic, Hyundai Motor's sales, turnover and operating profit in the first half of this year plunged 24 percent, 7 percent and 30 percent, respectively, from 2019.
Even more noteworthy than the pay freeze was their "social declaration" for co-prosperity. In the declaration, the union and management stipulated efforts to secure future competitiveness, job security, changes in duties to keep up with industry changes, and a better partnership with suppliers. The global car industry has launched an epochal transformation marked by the paradigm change to electric, hydrogen and self-driving cars. If the domestic industry fails to jump on the bandwagon, it has no future. It is good that Hyundai Motor's management and union are facing up to this reality.
Almost all key industries are struggling as there is no end in sight for the coronavirus pandemic. Plunging sales are driving many companies out of business, leading to mass layoffs. Union-management cooperation is more urgent than ever before to keep businesses afloat and protect jobs. Hyundai Motor has one of the country's largest and most militant unions with about 50,000 members.
The union's choice this time could likely have considerable effects on other carmakers' wage negotiations. It also may serve as an occasion to change the industry's rigid, confrontational union culture to a more cooperative one. Carmakers, and other industries for that matter, need to recall the grand compromise between the government, unions and management in late July. Both employers and employees ought to bear in mind that only mutual concessions and open-mindedness can ensure their survival and promote innovation.
