Where GM Once Led, Others Now Follow – What Do Auto Strikes Accomplish?

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Move over, GM — Hyundai looks set to take over the top slot for worker militancy.

Not that GM suffers from that nowadays, but unrealistic worker expectations and overly strong unions were undoubtedly a part of GM’s malaise in the last century. South Korean workers have long held a reputation for being some of the most militant among Asian countries and an FT report serves to illustrate, in the midst of a global slowdown, that they have lost none of their hard-line approach.

According to the FT, Hyundai Motor’s labor union was set to stage the most damaging kind of partial strikes for six days to step up their push for higher wages and better working conditions. The paper said the 44,000-strong union will strike for up to eight hours for six days – three days last week and three this week – in an effort to force the company to accept their demands.

Union officials are holding out for 8.4-percent pay increases, an increase in the number of permanent jobs, and — get this — a 30 percent share of the company’s net profit as a bonus — oh, and an end to the overnight shift. Can a car company with the massive investment in plant and equipment really run profitably without operating 24 hours a day?

And as for demanding 30 percent of the company’s net profit as a worker’s bonus, that may be self-defeating; along with the other demands, Hyundai may see a much-reduced profit from here on in.

The union has its eyes on recent performance. The FT explains the carmaker reported a 19.5 percent jump in net profit to $4.4 billion in the second quarter of this year, with revenue rising 9.9 percent on the back of strong sales in Europe, which also helped to offset sluggish domestic consumption.

Hyundai’s European sales have done particularly well in spite of the region’s poor economic performance, surging 15.4 percent in the April-June period (despite the European auto market’s 6.3 percent fall) thanks to South Korea’s free trade pact with the region.

Meanwhile, workers in other auto manufacturers across the country have said they will join in. Kia Motors, Hyundai’s affiliate, has said they will support the strikes and GM Korea has already lost 12,000 cars following a strike in July, and are said to be planning another two days this month.

Asian carmakers in the US and Europe are quietly getting on with producing quality cars without fanfare or drama. Indeed in the UK, car exports, led by Indian-owned Jaguar Land Rover and Japanese carmakers such as Nissan and Honda, are contributing to record exports and some of the highest levels of production efficiency in the region.

Long may it continue.

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