Gwangju job project reaches agreement

The Korea Times

The Korea Times

Business

Wed, November 29, 2023 | 08:53

Companies

Gwangju job project reaches agreement

Posted : 2019-01-31 17:00

Updated : 2019-01-31 17:00

President Moon Jae-in holds hands with stakeholders in a job project for Gwangju after a signing ceremony at Gwangju City Hall, Thursday. From left are Federation of Korean Trade Unions Gwangju chapter chief Yoon Jong-hae, Gwangju Mayor Lee Yong-seop, Moon and Hyundai Motor President Lee Won-hee. Yonhap

By Nam Hyun-woo

An agreement was reached Thursday for Hyundai Motor to build a plant in Gwangju that will create up to 12,000 jobs. The accord came after a series of botched negotiations between the union, city government and the carmaker over labor conditions at the proposed factory.

According to officials, Hyundai Motor agreed to the project proposed by the Gwangju government, a day after the latter and unions reached an agreement on labor-management relations and wage negotiations.

"This is an outcome we have awaited for four-and-a-half years," said President Moon Jae-in who attended a signing ceremony for the agreement.

"The project will be a historical turning point toward job creation and will be proof that agreements can keep wages at an appropriate level and create more jobs," he said. "Also, it is a model case for the mutual prosperity of workers and management, showing that our society has become mature."

The plant will cost 280 billion won, with the local government paying in 59 billion won ($53.1 million), making it the largest stakeholder with 21 percent, while Hyundai Motor will invest 53 billion won for a 19 percent share.

Gwangju will seek to raise the remainder from investments by local communities, public institutions and other investors, although Hyundai pledged to remain as a potential future investor.

The plant will be capable of producing 100,000 mini SUVs, which Hyundai Motor has not been releasing new models of since 2002, leaving the sector to Kia Motors and GM Korea.

Should the plan go as scheduled, the plant will go into operation in 2021. New workers will get an annual salary of 35 million won, almost half the average pay at the five domestic carmakers in 2016.

The agreement came after the unions withdrew their earlier opposition to a clause in the wage conditions, which stated employees at the plant could not engage in collective bargaining until the plant produced 350,000 vehicles.

In botched negotiations in December, the unions demanded the clause be scrapped, but Hyundai Motor rejected this.

"With the project, Hyundai Motor plans to develop new SUVs to secure its domestic competitiveness in the mini SUV segment," a company official said.

However, the group's union denounced the deal, with some leaders staging a walkout to oppose the project.

"Due to the project, up to 12,000 jobs will disappear in other regions and many auto parts suppliers will go bankrupt," the union said in a statement. "Also, it will bring a collapse in the existing labor market order and drag down other employees' wages."

The union added it will soon decide on a method to protest the deal.

The Korean Confederation of Trade Unions, which is the umbrella union of the Hyundai Motor union, also said the agreement seriously undermined employees' rights, blaming the Federation of Korean Trade Unions, another umbrella union which joined the negotiations with the Gwangju government.

namhw@koreatimes.co.kr