HR Problems in Hyundai Motor Co.
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Case Details:
Case Code : HROB058
Case Length : 12 Pages
Period : 1960-2004
Pub Date : 2004
Teaching Note :Not Available Organization : Hyundai Motor Co.
Industry : Auto and Ancillaries Countries : India
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"If the company refuses to accept our demands, we have no
choice but to go on a full-fledged strike. As the union leader, I cannot control
the anger of the union."
-Hyundai union leader Kim Kwang-shik, July 1998.1
"Laws and principles, along with dialogue and compromise,
should be adhered to in dealing with labor issues."
-Choi Kil-seon, president and CEO of Ulsan-based Hyundai
Heavy Industries in an interview to The Washington Times, June 2003.2
Introduction
The Hyundai Motor Co. (Hyundai), South Korea's largest automobile manufacturer
was in the midst of acute labor problems in the late 1990s and early 2000s.
Until the mid 1990s, Hyundai had been successful in handling South Korea's
traditionally disruptive labor unions. It had kept strikes at bay with nearly
double-digit pay hikes and other benefits. But the Southeast Asian crisis3
and the general slump in the automobile industry in the late 1990s forced the
company to restructure and cut down jobs. However, the Hyundai labor union and
workers rebelled against the management's efforts to restructure the
organization and the company faced strikes and worker unrest repeatedly from
late 1990s to early 2000s.
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Members of the Hyundai group4 such as
the Hyundai Construction and Engineering and Hynix Semiconductor were also
facing financial troubles at the time, and were on the brink of insolvency.
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Founder chairman of the Hyundai Group, Chung Ju-yung commented, "We
are losing our international competitiveness."5
Regretting the continuous labor unrest, he said, "Wages have doubled
in three years and productivity has gone down."6
The labor problems Hyundai faced were not an isolated case in South
Korea. By the late 1990s, the chaebols had grown into large
mismanaged structures with many having several unprofitable units.
During the economic slump of the late 1990s, most of these chaebols
felt the need to downsize. |
HR Problems in Hyundai Motor Co.
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