The heads of South Korea’s top finished car makers frustrated with wrangling with powerful unions and repeated strikes that disrupt production urged the government to tackle the rigidity in labor laws by allowing them to more freely use agency and temporary workers.

CEOs representing five car labels produced in Korea met with Minister of Trade, Industry and Energy Joo Hyung-hwan at the Conrad Hotel in Yeouido, Seoul on Wednesday.

The Korean automakers saw their domestic sales fall 12.1 percent on year in July as the special sales tax incentive ended in June and also hurt by partial strikes at some industrial sites. The automobile exports in July dropped 14.9 percent on year.

GM Korea CEO James Kim said that the government should step in to address labor policies that are too much in favor of unionized workers. He said that Korea is the only country in the world where a wage negotiation is held on a yearly basis, and this practice would hurt the Korean auto industry’s competitiveness on the global stage. “GM’s U.S. headquarters think highly of Korea’s superior supply chains, so the labor issues are only problems that need fixing,” he added.

Hyundai Motor Co.’s President Chung Jin-haeng said that Korean auto labor unions are too powerful as the management is banned from hiring replacement workers during a strike period. He asked that the government should allow companies to use agency workers like many other countries in the world. The government proposed a bill to allow agency workers, but dropped it due to strong protest from the labor and opposition camp.

The Korea Economic Research Institute estimated that allowing replacement workers during strikes would reduce an average walkout period by 34.3 percent and add around 200,000 new jobs.

Joo said that the government will do its part and asked the automakers should also strive to improve labor-management relations.

By Park Chang-young

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]