Foreign automakers can import their small cars into Korea, but without city-car certification they must compete against homegrown models that meet the requirements and entice buyers with many government incentives.
Officially they’re separate companies, but group Chairman Chung Mong-koo has Hyundai and Kia working closely in concert as he looks to maximize efficiencies and continue to move the two up the world rankings of biggest and best-loved brands.
Anger over the Hyundai chairman’s Gangnam real-estate splurge seemingly was outweighed by the more than $25,000 in higher wages and added bonuses for every fulltime worker. Analysts who were skeptical but not publicly critical of the Gangnam deal now are saying it was a brilliant, forward-thinking move.
Should Hyundai’s labor costs go up inordinately by accepting the union’s wage-recalculation demand, suppliers would be squeezed to cut their margins and they would do likewise with their own smaller suppliers of parts, materials and services.
The KMWU says on its website it had no choice but to call a strike as Hyundai negotiators would not budge on any of the union’s major proposals, including the key demand the automaker include bonus payments in calculating basic wages.
Analysts note that while this week’s expected verdicts are subject to a lengthy appeal process, rulings in favor of the workers will have a resounding effect throughout not only Korea’s automotive industry but also the entire manufacturing sector.
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