Government, Hyundai should continue support for job creation
Gwangju Global Motors (GGM), a provincial automaker launched as part of the Moon Jae-in administration's "win-win job creation project," has rolled out its first car, a mini-SUV branded as the Casper. The event was the fruit borne two years after local unions and management, and the private and public sectors, signed a "win-win agreement," seven years after they began to discuss the project.
GGM made the subcompact sports utility vehicle under consignment from its second-largest shareholder, Hyundai Motor. On Tuesday alone, the number of online preorders totaled 18,940, exceeding the estimated production volume of 12,000 for the remainder of the year. Consumers showed an enthusiastic response to the Casper for its reasonable price, starting at 13.85 million won ($11,850) plus various safety and convenience devices. This is good news that has crushed much of the skepticism about the viability of such a job creation model.
The "Gwangju-type job-creating model," named after the city some 330 km southwest of Seoul, has drawn interest as a program that can reinvigorate regional economies faced with an unemployment crisis. It also marked a new approach that promises appropriate wages, proper working hours and better relations between prime contractors and suppliers. The program has already generated employment effects by directly hiring 539 employees, half of them in their 20s. If the company makes 100,000 vehicles a year, it will directly employ 1,000 workers and indirectly hire 11,000 people.
GGM employees' average wage stands at 35 million won a year based on a 44-hour workweek, about 40 percent of the 88 million won received by an average manufacturing worker at Hyundai Motor. To compensate for the lower income, the municipal administration, aided by the central government, provides various support, including housing, public daycare, sports facilities, and commuter bus services ― as "social wages."
For this model to take root, unions and management should help each other as equal partners, and central and local governments and Hyundai Motor should spare no efforts in providing support. As the workers' wage level is lower than other automakers, it is essential to guarantee substantial "social wages." Beyond Gwangju, the win-win accords have been signed by seven other cities since 2019. We hope that GGM will move beyond the regional job-creation formula and create a "K-job model."