Life & Style | Motoring
Hyundai parked at a critical juncture
Every year South Korea's top automaker suffers from disruptive and costly strikes by its belligerent union, and every year it responds with tough talk, even filing lawsuits against its workers.
- Financial Times
- Published: 00:00 January 22, 2007
Every year South Korea's top automaker suffers from disruptive and costly strikes by its belligerent union, and every year it responds with tough talk, even filing lawsuits against its workers.
But in the face of action from its 44,000 unionised staff in Korea, who have the power to cripple domestic production, Hyundai has always caved in.
Will this time be different? Hyundai insists that it is fed up with its union, whose leaders now face arrest for repeatedly organising "illegal" strikes, and says it will break from past practice and institute global management standards.
As a company it is at a critical juncture - its union is eroding its competitiveness and profitability in the cut-throat world of car manufacturing; and giving rivals a chance to steal a march in developing markets such as India and Russia.
At the same time it is facing a year of management change. Lawyers say if a prison sentence is imposed on Chung Mong-koo, the chairman, for alleged embezzlement and breach of trust - as prosecutors are demanding - it is likely to be suspended.
Whatever happens in court, the 68-year-old is preparing to put his son, Chung Eui-son, who now runs affiliate Kia Motors, in the Hyundai driving seat. That could be a test for a company used to operating under the famously micro-managing elder Chung.
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