Porsche dealers join militant umbrella union

By Nam Hyun-woo

The union of dealers and mechanics for Porsche Korea has joined the Korean Metal Workers' Union (KMWU), an umbrella organization known for its hard-line practices, heralding its employees will have a stronger influence against the management.

According to an official at KMWU, the union, comprised of more than 50 agents and mechanics, has joined KMWU's Seoul Chapter as Porsche Korea Local Union earlier this month. This is the first time an import car brand union has joined the umbrella body.

The local union was formerly a labor union of Stuttgart Sports Cars Ltd. (SSCL), which had been importing and selling Porsche cars in Korea and became a dealer company after Porsche Korea was established in 2014.

“For the past three years, we have failed to reach agreements on base wage, incentives and other payments, while our salary has plunged due to the sales suspension of Porsche Korea,” said Kim Chang-kyu, the leader of the Porsche union.

As the union became a member of KMWU, industry officials said members are expected to gain more influence in their battle with Porsche Korea over compensation for the latter's sales suspension of several models.

Since 2016, Porsche Korea has been facing suspensions on several diesel models for not meeting domestic regulations. Last year, it suspended sales of the Cayenne diesel model and halted those of some Macan models for months over emissions test rigging.

The union members claim the sales suspension incurred losses for dealers and filed a class action suit with the Seoul Central District Court demanding compensation worth 5 million won ($4,465) for each dealer.

According to Kim, a suspension of sales causes direct damage to sales agents, because most of their salary is comprised of incentives for selling cars.

“The company (SSCL) gives base pay meeting Korea's minimum wage rule only when an agent failed to sell a single car in a month. Otherwise, the company sets the base pay far lower than the statutory minimum wage,” Kim said.

“As Porsche cars are suspended from sales, customers who signed contracts before the suspension had to cancel their deals after waiting nearly a year, while agents are blamed. We are also victims too.”

Despite the suspension, Porsche Korea did not send an apology to customers.

Another problem Kim pointed out is the nearly 300 Macan vehicles suspended from sales and stored in the Pyeongtaek Port, Gyeonggi Province. Unlike other import brands, Porsche has its dealer companies to pay for cars before handing them over to customers.

After most customers canceled their deals, Porsche Korea said its suspension would be lifted soon and dealers began selling those stored cars, but those cars are yet to be released, with a growing number of customers again cancelling their deals.

“Porsche Korea has said they would buy back those cars if the sales become unavailable, but refused to do so, saying the suspension would be lifted soon,” a separate Porsche dealer said, asking not to be named.

Porsche Korea said it has not decided on buying back stored vehicle and has no comment on these issues.