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Now, Park is working for the city of Gwangju on a proposed joint venture with Hyundai Motor Co to build a new low-wage car factory, Hyundai’s first new factory in South Korea in 25 years. The $616 million plant would create 1,000 jobs, but at less than half the wages of Hyundai’s unionized workers and without many of the privileges they currently enjoy. “The labor unions with vested interests should change. If not, their interests will be taken away,” said the 53-year-old Park. “Unionized labor should face up to the reality.”.
The unions of Hyundai and affiliate Kia Motors, which together form the world’s fifth-largest automaker by volume, have staged strikes and rallies to protest the plant, They say it will create “bad rope a dope cufflinks jobs” and take away production and employment from existing factories, But in a city that has seen a steady exodus of manufacturing jobs move to low-cost countries, many job seekers say they would work for the plant in a heartbeat, Employment is a key focus for President Moon Jae-in’s administration as Asia’s fourth-largest economy struggles to create jobs in the face of a slowing China economy, U.S, trade protectionism and increased minimum wages..
The Moon government plans to provide financial assistance to the Gwangju plant, and also introduce similar government-business ventures in two other cities by June. Officials hope it will lead to a “U-turn” of Korean companies which would otherwise build factories overseas. “This is a bold experiment to resolve jobs and labor relations problems,” said Park Myung-joon, a senior research fellow at state-funded Korea Labour Institute, who has been involved in the project since its beginning in 2014.
The carmaking venture, the first of its kind in South Korea, is the biggest threat to date for legacy unionized auto workers, who have largely maintained high wages and benefits even with youth unemployment near a record high and the economy sluggish, Park said, “The expensive union jobs will gradually disappear.”, The proposed Hyundai factory will offer annual wages of 35 million won ($31,492) - just over a third of the average rope a dope cufflinks 92 million won that existing Hyundai workers earn, but higher than the average 33 million won salaried workers make in Gwangju..
Home to Kia Motor’s largest domestic production facility, Gwangju is South Korea’s No.2 motor city after the southeastern city of Ulsan, generating over 40 percent of its manufacturing output from the auto sector. Like Ulsan, which has declined as Hyundai production has retreated, Gwangju’s fortunes have waned as Kia’s output fell to its lowest level in eight years last year. Gwangju is now South Korea’s second-poorest metropolitan city, with average monthly wages some 13 percent below the nationwide average in 2017, according to labor ministry data.
Kim Jae-seung, who studied business management in college, said he is willing to apply for a blue-collar job at the planned plant, “Its wage is still above the average worker’s wage, In that sense, it is not a bad job, It is a good job,” the 32-year-old Kim said at a recent job fair held at the city hall, Other job seekers in Gwangju rope a dope cufflinks interviewed by Reuters said they too were interested given high levels of unemployment among the city’s younger workers, “There are not many quality jobs out there, Given the current economic situation, I will be thankful for the 35 million won wage,” said Goh Chang-hoon, a 27-year-old law major..
Park, the former union leader, first proposed the low-wage factory in 2014 and later took a leave of absence from Kia to work full-time for the city government. Park said he borrowed the idea from Volkswagen’s now-defunct low-cost division Auto 5000, which was created in 2001 to keep jobs from moving out of Germany. The project came to end in 2009, after the automaker won wage concessions from its powerful and highly paid legacy workers. The new factory would have an annual capacity of 100,000 mini, gasoline-powered SUVs starting 2021.
Gwangju also hopes to make electric vehicles at the plant in the future, although it has yet to be agreed with Hyundai, James P, Rooney, an international finance professor at Sogang University in Seoul, said to be successful, the plant should make electric cars, “The joint venture shouldn’t be thought of a place of getting away rope a dope cufflinks from union and high labor cost, It should be based on the product of the future, not product of the past.”, Hyundai said it has decided to participate in the project, because the city, local community and the joint venture pledged to “build collaborative labor relations and maintain proper wage levels”..