EDITORIAL from the Korea Times on Nov. 13)

Carmakers??? Survival
Industrial Peace Has Become More Vital Than Ever

The car industry, the flower of manufacturing, is bearing the brunt of the global
financial crisis spreading to a broader economy.

American automakers, which have surrendered more than half of their domestic
market to Asian and European competitors, are hovering between life and death,
craving for additional federal financial aid. President Bush will eventually
accept his successor's plea for rescue in view of the industry's importance on
the U.S. economy, both symbolically and substantively.
The Korean carmakers need to closely watch the road the ``big-three" U.S.
carmakers ??? G.M., Ford and Chrysler ??? have taken not to repeat their failure
and ensure survival both at home and abroad.
As is well known, the U.S. auto industry's collapse is due to its failure to
satisfy changing consumer demands, continuing to turn out gas guzzlers and
providing less than adequate after-sales services, while bleeding heavily due to
excessive welfare expenditure to employees and even ex-employees.
On the opposite side are their Japanese rivals, including Toyota, which emerged
as the world's No. 1 carmaker by supplying more efficient and convenient vehicles
at competitive prices based on harmonious labor-management relationship.
Which model the Korean companies should follow appears all too apparent, but the
reality facing them is not that simple. The domestic autoworkers are best known
for their militant unionism with employees at the biggest Hyundai-Kia Automotive
Group, for instance, having downed their tools for 124 days so far this year.
Even more serious is that the wage level of unionized autoworkers is way above
the national average, and almost twice as much as those of non-regular workers
doing the same jobs.
Hyundai-Kia's managers cannot even retool assembly lines for more flexible
production without getting the green light from the unions in what industry
analysts call the ``confrontational but collusive" labor-management relationship,
in which a voluminous expansion-oriented company and a money-minded union combine
to effectively deter further improvement in the automaker's bottom lines and
other corporate reforms.
Korea is the only emerging economy, which has surfaced as one of the world's
``big-5'' auto industry powers, but the lessons of the U.S. carmakers show how
the global rankings and sales figures turn meaningless unless they are
accompanied by ceaseless technological and managerial renovations, as their
Japanese competitors have successfully done.
This is a dog-eat-dog period for the global auto industry, in which even Toyota
has had to lower its revenue target to half. To make things worse, the nation's
auto industry has been singled out ??? wrongly rather than rightly ??? as an
unfair trader by U.S. President-elect Obama, who promises to revive the moribund
U.S. vehicle makers.
Trade officials will have to go to great lengths to dissuade misconceptions about
trade reality within the new U.S. administration to keep Korea from becoming the
scapegoat of resurgent protectionism.
The auto industry for its part ought to embark on a long, painful restructuring
process by trimming organization, cutting costs and renovating technology to turn
out more fuel-efficient and cleaner vehicles. The time has long past for domestic
industry to resort to cheap price tags abroad as well as patriotic ??? or captive
??? consumers at home.
Starting this drive should be the overhaul of the rusty, unproductive
labor-management relationship.
(END)