Auto workers support rapid and fair transition to combat climate change

By Jang Daul

The Korean automotive industry began in 1955 when the first car, "Sibal," was produced. The name means "new start." The first ever Korean-developed car was the Hyundai Pony in 1975. Since then, the auto industry has played an important role in the Korean economy.

Korea is the fifth largest automobile producer in the world now and automobiles rank second among top export items from Korea. However, the Korean car industry faces a big challenge now as do their global competitors. The industry might need another new start.

Due to the urgency and severity of the global climate crisis, the transition from internal combustion engine (ICE) vehicles to zero-emission battery electric vehicles (EVs) to reduce carbon emissions from the road transport sector is accelerating.

The International Energy Agency recommended no new car sales with ICEs worldwide from 2035 onwards in its net zero roadmap by 2050.

Norway will completely ban the sale of new petrol and diesel cars by 2025 followed by the entire European Union by 2035, aiming to speed up the transition to zero-emission vehicles to combat global warming.

Global advanced automakers are also changing quickly to tackle the climate emergency as well as keeping their industrial competitiveness in the changing global policy environment and market trends.

Audi has announced that new models will be 100 percent electric from 2026. Volvo plans to become a fully electric car company by 2030. GM plans to completely phase out vehicles using ICEs by 2035.

The Korean auto industry needs to follow the global trend to keep its competitiveness and to be responsible for the common climate threat. However, such transformation from ICE to EVs will have an impact on the employment of the Korean auto industry as well as the regions where the industry is located.

According to the Korea Automobile Manufacturers Association, the direct employment scale of the Korean auto industry was 360,000 in 2018. Therefore, a strong social safety net needs to be provided during the transition. Also more importantly, the designing of the transition policy should be a participatory process in close consultation with workers and their unions.

On April 14, 2022, Greenpeace together with the Korean Metal Workers' Union (KMWU) released the results of a survey on 1,019 auto workers from Hyundai Motor, Kia Motors, and GM Korea.

The survey was conducted to understand the workers' perception on the global climate crisis, the transformation from ICE to electric vehicles and the just transition of the Korean auto industry. It was the first survey of its kind in Korea and the result drew much attention from the media and decision makers.

It turned out that Korean auto workers perceive the climate crisis as severe since 94.3 percent of respondents said that the climate crisis was "extremely" or "very" serious, with a majority citing a recent increase in "extreme weather events" as the main trigger for such a perception.

Surprisingly, a total of 82.2 percent of respondents favored a ban on the sales of new ICE vehicles by 2035. Even 63.5 percent of respondents supported the ban by or before 2030.

The result shows that auto union workers are thinking more progressively than the corporations they work for because Hyundai and Kia plan to stop producing ICE vehicles by 2040 ― only in major markets including South Korea. After all, it is corporate leadership that is holding back ambitious climate action, not auto industry employees.

The high support rate on the ICE ban by 2035 is not because the respondents assume no impact on employment due to the transition. In fact, it is quite the opposite. Most respondents said that automobile industry employment would decrease with the transition.

However, the support is not unconditional. The respondents answered that the government should put priority on the governance structure engaging labor unions and budget support for re-skilling and re-training.

The results of this survey sent a strong signal to President-elect Yoon Suk-yeol and his transition committee because Yoon promised to ban the new registration of ICE vehicles from 2035 as one of his election pledges.

Recently, a U.K.-based independent economic consultancy, Cambridge Econometrics, published a report, "The macroeconomic impact of decarbonizing Korea's passenger car fleet." The report analyzed wider economic and employment effects of the different decarbonization scenarios of the Korean passenger car fleet.

The analysis shows that if new sales of ICE vehicles are banned from 2035, the national oil import will be reduced by 40 percent while GDP will increase by 0.26 percent by 2050 compared to 2020. The cumulative greenhouse gas emission reduction from 2020 to 2050 will be 801 million tons of carbon dioxide equivalent.

Also, the analysis suggests that "the more rapidly the transition takes place, the greater the scale of these changes and the bigger the economic changes during the transition."

Therefore, I look forward to seeing President-elect Yoon follow through on his election pledge to ban the new registration of ICE vehicles from 2035 with a strong focus on a just and inclusive transition which will contribute to not only mitigating the dire consequences of global climate change but also keeping the industrial competitiveness of the Korean auto industry.

Jang Daul (daul.jang@greenpeace.org) is a government relations and advocacy specialist at Greenpeace East Asia Seoul office.