Korea should prepare for worst-case scenario
U.S. President Donald Trump has warned that he might slap heavy import duties on imported motor vehicles, including Korean cars.
Meeting with the senior executives of 10 major automakers at the White House last Friday, President Trump urged them to "build more vehicles in the United States." He then reportedly hinted at imposing a 20-percent tariff on imported cars as well as toughening emissions standards.
It would be premature to conclude Trump's remarks at the government-industry meeting as the official position of the U.S. government. That does not mean, however, Korean automakers can remain complacent, given most of the U.S. leader's trade warnings have become a reality, as seen by the punitive duties on steel imports.
Some trade experts here predict Washington may apply national security standards to auto imports as it did on foreign steel products, to avoid controversy over violating World Trade Organization rules.
If and when such concerns are materialized, the nation's auto industry is highly likely to face its biggest crisis. Domestic automakers have already been going downhill, hit by a rigid labor-management culture and the high-cost, low-efficiency structure.
Korea's auto production dwindled from 4.65 million vehicles in 2011 to 4.11 million last year. If a considerable share of the 600,000 cars that have been exported to America turns into local production, the domestic output is sure to drop further. That, in turn, will make a noticeable dent in the number of decent jobs in this country. A rapid relocation of the auto manufacturing base abroad may also shake the foundation of the domestic auto parts and component industry.
To head off such a scenario, Korea needs to make pre-emptive moves before the U.S. threats turn into reality. The Moon Jae-in administration ought to activate a government-civic task force to persuade the U.S. Congress to create a favorable environment for Korea. Also necessary is forming a joint front with other auto exporting nations, such as Germany and Japan.
Korea's autoworkers for their part have to face up to this reality. This is time for both unions and management to think of ways to enhance productivity. For now, that seems to be the only way to maintain existing jobs.
U.S. President Donald Trump has warned that he might slap heavy import duties on imported motor vehicles, including Korean cars.
Meeting with the senior executives of 10 major automakers at the White House last Friday, President Trump urged them to "build more vehicles in the United States." He then reportedly hinted at imposing a 20-percent tariff on imported cars as well as toughening emissions standards.
It would be premature to conclude Trump's remarks at the government-industry meeting as the official position of the U.S. government. That does not mean, however, Korean automakers can remain complacent, given most of the U.S. leader's trade warnings have become a reality, as seen by the punitive duties on steel imports.
Some trade experts here predict Washington may apply national security standards to auto imports as it did on foreign steel products, to avoid controversy over violating World Trade Organization rules.
If and when such concerns are materialized, the nation's auto industry is highly likely to face its biggest crisis. Domestic automakers have already been going downhill, hit by a rigid labor-management culture and the high-cost, low-efficiency structure.
Korea's auto production dwindled from 4.65 million vehicles in 2011 to 4.11 million last year. If a considerable share of the 600,000 cars that have been exported to America turns into local production, the domestic output is sure to drop further. That, in turn, will make a noticeable dent in the number of decent jobs in this country. A rapid relocation of the auto manufacturing base abroad may also shake the foundation of the domestic auto parts and component industry.
To head off such a scenario, Korea needs to make pre-emptive moves before the U.S. threats turn into reality. The Moon Jae-in administration ought to activate a government-civic task force to persuade the U.S. Congress to create a favorable environment for Korea. Also necessary is forming a joint front with other auto exporting nations, such as Germany and Japan.
Korea's autoworkers for their part have to face up to this reality. This is time for both unions and management to think of ways to enhance productivity. For now, that seems to be the only way to maintain existing jobs.
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