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August 29, 2008
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| Hyundai-Kia Automotive Group, the nation’s leading automaker, faces a tough situation in its India unit. Conflicting labor unions there are threatening quality and productivity. The Indian corporation, located in Chennai, on India’s southeast coast, has reported more than 30 percent annual growth in recent years, the best among Hyundai-Kia’s six overseas corporations. Hyundai Motor Chairman Chung Mong-koo has visited India every year since 2000 to encourage the company’s Indian employees. Hyundai-Kia said the corporation has regularly earned more than 100 billion won ($92.5 million) in annual revenues in recent years. However, as conflicts between the two labor groups worsen, the corporation’s earnings fell to 3.5 billion won in the first half of this year, compared to 102.9 billion won a year ago. In fact, India is the first overseas location to have a labor union among Hyunda-Kia’s foreign plants. The conflict dates back to last year, when hard-line union members and company-supported union members began a feud over which would represent the company. As a result of the power struggle, about 500 union members have been arrested by police. “We realized Indian employees wanted to make a labor union at the end of last year, so we encouraged them to make their voice heard in a constructive way,” an official of Hyundai-Kia, who wanted to be unnamed, said. “But this caused a problem because hardliners think of their counterparts as pro-company,” he added. As a result of the dispute, the Indian corporation has seen declining sales. Although the Indian corporation produces more than 20,000 cars every month, only 15,066 cars were sold last month. In addition, quality and productivity have decreased. As a result of the dispute, it remains uncertain whether Hyundai-Kia’s biggest overseas corporation would achieve its production goal of 530,000 cars this year. In addition, the Indian corporation was supposed to provide engines for Kia’s compact Morning to Korean plants. The Morning is in high demand because of high fuel costs here. But it is uncertain whether the Indian corporation will deliver the engines to Korea. By Kim Tae-jin JoongAng Ilbo[so@joongang.co.kr] |
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