The new factory is expected to create 12,000 jobs in Gwangju, the result of stakeholders in labor, management and the public and private sectors each making a considerable sacrifice to help address the severe unemployment issue facing South Korea’s younger generation. (image: Yonhap)
SEOUL, Feb. 1 (Korea Bizwire) — The city of Gwangju and Hyundai Motor Co. signed an investment agreement on Wednesday to build a vehicle assembly plant in Gwangju.
South Korean President Moon Jae-in was also present at the signing ceremony.
The feat comes after a series of delays over one of the articles included in the agreement, in which negotiations on wages and a collective bargaining agreement would be put off until the new factory produces 350,000 cars.
Signing the agreement was made possible only after the insertion of an additional paragraph in which Hyundai promised to ensure labor union activities.
The new vehicle assembly plant was on the verge of being scrapped last year before President Moon, at his New Year’s press conference, asked all stakeholders to come together to reach a deal.
Gwangju’s relentless behind-the-scenes efforts to continue negotiations also contributed to the successful signing of the agreement.
More than 700 billion won ($626.3 million) will be invested to build the new vehicle assembly plant in Gwangju’s Bitgurin Industrial Complex. (image: Yonhap)
More than 700 billion won (US$626.3 million) will be invested to build the new vehicle assembly plant in Gwangju’s Bitgurin Industrial Complex.
The factory will produce 100,000 sports utility vehicles each year, while employees will receive an annual salary starting at 35 million won (US$31,328), which is slightly less than employees at other South Korean car manufacturers.
In exchange, however, they will be provided with housing aid, education subsidies and other welfare benefits.
The new factory is expected to create 12,000 jobs in Gwangju, the result of stakeholders in labor, management and the public and private sectors each making a considerable sacrifice to help address the severe unemployment issue facing South Korea’s younger generatiion.
There are problems that still need to be addressed.
For one, the Korean Confederation of Trade Unions and Hyundai Motor Labor Union are strongly opposing the initiative. Financing the new factory is also an ongoing issue.
At first, Gwangju’s new job creation project was met with strong pessimism. However, the investment agreement has been signed.
It is hoped that Gwangju’s perseverance can inspire others to develop new job creation solutions for South Korea.
H. M. Kang (hmkang@koreabizwire.com)
