Switch to EVs Expected to Speed up Manpower Adjustment in Auto Industry

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With the rapid growth of the electric vehicle market, demand for assembly workers is on a gradual decrease.

In the era of industrial transition, manpower adjustment has emerged as the biggest topic in the automobile industry. With the rapid growth of the electric vehicle market, demand for production workers is on a gradual decrease. As a result, confrontation between the labor and management is intensifying.

The management of GM Korea delivered a plan to redeploy production workers at Bupyeong Plant 2, which will end vehicle production in November 2022, to the company’s union at a meeting on employment stability held on April 7. The management plans to move 1,500 workers at Bupyeong Plant 2 to Bupyeong Plant 1 and Changwon Plant in stages by the end of this year.

A prevailing view among those in the automobile industry is that the closure of the factory is the result of GM Korea’s failure to secure new vehicle models, including electric vehicles, which will determine the company’s future. There is also concern that Bupyeong Plant 2 will be shut down like Gunsan Plant if no alternative can be found to solve the chronic work shortage situation.

As the plan on the shutdown of Bupyeong Plant 2 was announced, the possibility of a restructuring has been also raised. Sources say that a human resources restructuring will hit not only Bupyeong Plant 2 but Bupyeong Plant 1 where hundreds of new workers will be added soon and Changwon Plant where production of a new crossover utility vehicle (CUV) will be started, mainly targeting employees of partners and non-regular workers.

The management of Hyundai Motor Co, which responded relatively quickly to the electric vehicle market, is also at loggerheads with the labor union over a human resources management issue. A conversion to electric vehicles from internal combustion engine vehicles is expected to slash employment by about 30 percent at Hyundai Motor. In response, the automaker plans to prune its workforce through natural reduction methods such as retirement under the age limit, but the labor union is sticking to an opposite view.

The new leadership of the labor union which took office at the beginning of 2022 recently presented the recruitment of new personnel as a key requirement through the Labor-Management Council. The labor union is asserting that new hires should be pursued rather than filling the naturally reduced number of employees with contract workers. The Kia Labor Union is also putting job security as its top priority in negotiating a collective agreement in 2022, so a rugged road is expected in negotiations in 2022.

Industry analysts say that as the transition to electric vehicles accelerates, the labor-management conflict over job security will heat up. In particular, it is pointed out that automakers will have no choice but to become passive in hiring unless the problem of rigidity in employment is resolved.

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