The company does not belong solely to the president or shareholders. The workers employed there are also a part of the company.
Workers have the right to form unions, negotiate collectively, and strike if their demands are not t.
When CarOS acquired Chrysler, it included provisions regarding employnt succession. Therefore, we did not implent wage cuts or restructuring after the acquisition.
Ryan said, “If production disruptions occur, even the remaining sales network will completely collapse.”
The nature of the automotive industry, with its reliance on conveyor belt operations, ans that if workers at one stage of the process stop working, the entire factory halts.
Given the large number of workers and their strength, unions have traditionally been strong.
In the past, the United Auto Workers (UAW) were infamous for targeting the most profitable of the Big Three (GM, Ford, Chrysler) in order to secure maximum wage increases and various benefits.
However, productivity did not improve in line with wage increases. This led to a high-cost, low-efficiency structure, which weakened the competitiveness of Arican automobiles.
Yet, such favorable conditions for workers did not last long.
When the financial crisis hit in 2008, the Big Three automakers collapsed simultaneously.
GM, as the eldest among the Big Three, closed 17 of its 47 plants in the U.S. and laid off one-third of its production workers.
The automotive industry has a significant employnt-generating effect and, consequently, a major impact on the economy.
The governnt enacted bailouts and demanded concessions from unions, leading the UAW to agree to wage freezes, defer strikes, and relinquish bonuses and various welfare benefits.
Though late, they realized the fundantal truth that for the company to survive, workers also must.
Subsequently, they actively agreed to reassignnt and retraining to enhance productivity. They changed their collective bargaining agreents from annually to every four years, enabling Arican automakers to establish more stable long-term managent plans.
As productivity improved, GM increased its U.S. output twofold instead of building overseas plants, hiring more workers.
However, Chrysler’s situation was not promising, even within the Big Three. That’s why the FCA Group hastily sought to sell. Unfortunately, the situation worsened after our acquisition.
The reason is that sales plumted after refusing the dealers’ request to raise margins.
“So production lines have stopped, and workers are feeling job insecurity. There are also significant complaints about reduced bonuses due to the loss of overti and special shifts.”
I let out a sigh and said, “Last ti it was the dealers’ problem, but this ti it’s the union’s problem.”
The automotive industry truly intertwines all the issues in manufacturing. No wonder not just anyone can jump in carelessly.
I picked up a docunt from my desk. It contained the union’s demands. I had glanced at it several tis before coming here, but I skimd it again.
“6.8% wage increase, a ban on layoffs for the next ten years, extension of retirent age, normalization of production lines… up to this point, I can understand.”
However, the demands below are ridiculous.
Distribution of company shares worth $30,000 per union mber, a 30% share of net profits upon turning a profit, involvent of union representatives in company managent, union consent for production line relocation, and union consent for the distribution of production volus at new factories, among others.
When I first saw these demands, I felt I had seen them sowhere before…
“It seems they’re learning from the Eunsung Motors union.”
Globally, automotive unions are powerful, but they cannot be compared to the Eunsung Motors union (limited to South Korea).
The Eunsung Motors union has a reputation for conducting annual strikes, making headlines worldwide. They are difficult to stop. Even the pro-business policies of the Park Si-hyeong governnt couldn’t touch them.
Just looking at the conditions they put forth each year is shocking.
Base salary increases, 30% of net profits as performance bonuses, bonus increases, retirent pay raises, retirent age extensions, preferences for long-term employees, full support for children of workers regarding entrance and tuition fees, negotiations with the union for new hires, discussions with the union for new overseas factories, collaboration with the union for model introduction and production volu distribution, negotiation with the union for production line relocation, and prioritization of employnt for children of long-term workers, among others.
At this point, it’s hard to distinguish whether they are workers or managent.
The union claims these demands are natural asures to improve low wages and poor working conditions, but one of the demands is prioritizing the employnt of children of long-term workers.
If a parent is a mber of the Eunsung Motors union, they want the opportunity for their descendants to work there too.
Criticism has poured in, likening this to a modern version of nepotism, but the Eunsung Motors union hasn’t flinched.
The original labor union is an organization aid at maximizing the interests of its mbers. Therefore, the Eunsung Car union only cares about its own share and has no need to worry about public opinion.
The problem is that the livelihoods of nurous workers from partner companies depend on Eunsung Car.
The mont the Eunsung Car union goes on strike and halts production, the factories of first, second, and third-tier suppliers also co to a complete stop.
It is said that when Eunsung Car coughs, the suppliers get pneumonia.
Thus, whenever it is the season for wage negotiations at Eunsung Car, the CEOs and workers of the partner companies desperately pray that the union does not strike.
However, the Eunsung Car union has consistently and vigorously struck every year.
The reason this is possible is that Eunsung Car has essentially established a monopoly in Korea. Both the managent and workers know that no matter what happens, the company will not go bankrupt.
As long as they make cars, they sell, so they can strike without any burden, unaffected by external variables like financial crises.
Despite the frequent strikes, how could Eunsung Car grow?
The answer lies in its overseas factories. If they had operated only in Korea, they would have gone under long ago.
Eunsung Car managent has mostly t the demands of the union. In exchange, they stopped building more factories in Korea, while continuously expanding factories in xico, Brazil, Russia, the Czech Republic, Turkey, India, China, Slovakia, and other countries.
This is not just true for Eunsung Car.
The fact that Korean automotive unions are powerful is already known worldwide, and other car companies are reluctant to build factories in Korea.
Since GM Daewoo established its factory in Gunsan in 1997, no new automotive factories have been built in Korea.
Naturally, dostic production has stagnated. Despite being an automotive powerhouse, Korea recently fell to sixth place, overtaken by India, and is expected to be surpassed by xico soon.
It is right to sincerely engage in negotiations with the union and et reasonable demands. However, once you start being dragged along, there is no solution.
“The first negotiation is in three days.”
I nodded.
“I will et with the union representatives directly. Until then, let’s think about the negotiation proposal.”
***
As ti was running out for negotiations, the etings continued without a mont to breathe.
I wrote three words on the whiteboard.
– Research and Developnt
– Production
– Sales
The stages of car manufacturing consist mainly of these three steps. First, new cars are researched and developed, then produced in factories, and finally sold to consurs.
I joked, “We should say that sales are currently a bust.”
At my words, those in the conference room smirked.
Cars are the second-largest asset after hos. Instead of paying in full cash, they are often bought through financing or leasing, aning financial institutions are inevitably involved in sales. Additionally, considering consur preferences and demand, inventory and supply must be professionally managed.
This role is fulfilled by dealerships.
Dealerships around the world sell vehicles to local consurs through consignnt or direct purchase. (The only exception is Nikola, which sells directly through its website without going through dealerships.)
“The problem is production….”
Research and developnt is done at headquarters, while sales are handled by dealerships. Naturally, production is the responsibility of factories.
In the past, it was common to have factories in the country where headquarters were located. GM was in the U.S., Toyota in Japan, Volkswagen in Germany, and Hyundai in Korea.
However, as the world globalized, car companies established factories in various countries.
For example, GM exports cars produced in U.S. factories to Korea and vice versa for cars made in Korean factories to the U.S.
As long as it is efficient, the location of production doesn’t matter, just as xico, which has no erging car brands, ranks as the seventh-largest car producer in the world.
Factories with lower productivity can be shut down at any ti. Recently, GM closed its Holden factory in Australia.
That said, it hasn’t withdrawn from the Australian market. The Holden brand continues to be sold, but the quantities previously produced in Australia are now produced in other countries for export.
Sales compete among different car brands, but production competes among factories in each region.
In other words, the Arican factory and the Korean factory, both part of GM, are actually competing over production volus. If the productivity of the Korean factory is deed low, it could be closed at any ti, similar to the case in Australia, and production could be shifted to another region.
“The area where CarOS has the greatest strength is not in production or sales, but in research and developnt.”
We possess the most advanced autonomous driving technology compared to our competitors. We plan to launch a new vehicle equipped with this technology for production.
Financially, we are tight on funds until the new car’s launch. If the money runs out, OTK Company will have to provide support again.
The issue is that OTK Company has limited funds left after purchasing SeosungSB shares and building the TS Company factory.
If production is disrupted, what would be the best course of action?
***
The first negotiation took place in a conference room at the Detroit factory.
We arrived early and waited. After a while, the door opened, and people ca in. I was startled when I saw the first person enter.
It was a middle-aged man with a bald head and a thick mustache and beard. He was nearly 2 ters tall. No, not just nearly, he was definitely over 2 ters.
Maybe around 2.2 ters?
He had a bulging belly, but his massive size didn’t make him feel fat. The forearm that peeked out from under his sleeve was thicker than my thigh.
The shining bald head under the light felt intimidating.
I thought my senior, Sang-yeop, looked like a bear, but compared to this man, he resembled a teddy bear.
Who on earth is this guy?
Could he be a pro wrestler sent to overpower the managent?
“I’m Union Chairman Dennis Block.”
“Oh, yes.”
So he’s the union chairman. I almost misunderstood. He kind of looks like Big Show.
But that wasn’t the end of it. Next, an African Arican resembling The Rock, and a white man who looked like Brock Lesnar entered and stood on either side of him.
Are union representatives chosen like pro wrestlers here?
Seeing the physicality of Arican workers made suddenly miss Korea.
Dennis looked at Ellie standing next to and said, “Did you bring your girlfriend to such an occasion?”
“Well…”
It’s true that she’s my girlfriend.
Ellie smiled as if nothing was wrong and introduced herself.
“Nice to et you. I’m attorney Ellie Kim.”
He looked taken aback, as if he didn’t expect such a beauty to be a lawyer.
“Hmm, nice to et you.”
Thanks to Ellie, I was able to regain so composure. Surely they wouldn’t hit just because the negotiations weren’t going well?
But if I were to be hit, I could die…
“I am Kang Jin-hoo, the CEO of OTK Company. Nice to et you.”
The union representatives looked at with curiosity. It seed they were surprised that I had co in person.
We each greeted one another and took our seats.
First, CEO Daryl of CarOS spoke up.
“I have thoroughly looked into the union’s demands. It is impossible for managent to accept all of those demands.”
At this, Dennis raised his eyebrows.
“If our demands are not accepted, we will have no choice but to go on strike.”
To go on strike, more than two-thirds of the union mbers must vote in favor. Given the current situation, the likelihood of approval is quite high.
I nodded.
“Well, then do what you must.”
The eyes of the union representatives turned towards in unison.
I continued, looking at them.
“I respect the rights of all workers. Even if you go on strike, there will be no workplace closures or layoffs. Salaries will continue to be paid. So, whether you choose to work while receiving a salary or go on strike, that decision is up to you.”
Reviews
All reviews (0)