At the Signing of the Gwangju Job Project, a Korean Adoption of the Auto 5000 Model

Abstract

The city of Gwangju and Hyundai Motors finally signed an agreement on January 31 on the much-anticipated Gwangju job project. Known as being motivated by the Auto 5000 model introduced at Volkswagen (VW) during 2001-2008, the project's objective is to create a joint venture between the city government and the carmaker. Beginning in 2021, the venture will produce new models of small sport-utility vehicles (SUVs) in an industrial complex in Gwangju. The city government will become the largest shareholder (21%), followed by Hyundai Motors (19%). The latter will also develop the new models to be produced and provide the necessary technological support from plant construction, operation, production and quality control to sales. If the project is implemented successfully, the Gwangju plant will be the first new automobile plant producing Hyundai cars in Korea in more than two decades, with a capacity of 100 thousand cars per annum. The final hurdle to the agreement was the carmaker's demand to fix the terms of employment until the accumulated production reaches 350 thousand cars. This was demanded in the name of providing stability and reducing uncertainty in the project's earliest phase, while the Federation of Korean Trade Unions (FKTU), the labor-side partner of the city government, saw it as a threat to basic labor rights. The agreement collapsed last December over this clause, but the FKTU accepted it this time, with its concerns reflected in the form of an annex.