Following labor-management agreements at SK hynix (000660.KS) and Samsung Electronics (005930.KS), demands for performance bonuses tied to "N% of operating profit" are spreading among major Korean corporate unions. Against this backdrop, the business community is drawing attention to its argument that Korean unions should follow the example of Toyota's union, the world's top automaker by sales.
The Korea Enterprises Federation (KEF) released a report titled "Implications of Toyota's Labor-Management Relations" on Monday, introducing key remarks made by the union side at this year's Toyota labor-management council. The report cited "Toyota Times," Toyota's in-house media outlet.
According to the report, the Toyota union, before demanding unconditional wage hikes or profit-sharing at the council, soberly acknowledged the reality of quality declines and production disruptions. Union Chairman Keisuke Kito said at the first through fourth council meetings, "If we continue with our current approach, fixed costs will only keep rising," adding, "We will break away from existing assumptions and uniform thinking, and review without sanctuary anything that obstructs transformation."
"Rather than waiting for the company or blaming others, we ourselves must take action," Kito stressed. "We will constantly ask ourselves how our (Toyota's) 'taken-for-granted' standards compare to the world and whether there is more we can do, and turn 'minuses' into 'zeros' and 'pluses.'"
Vice Chairman Daiki Akiyama said regarding the artificial intelligence (AI) transition, "We must face this with the resolve to change everything anew, while contemplating what skills I can offer and what my added value is."
The KEF pointed out that Toyota's stance contrasts with the actions of Korean corporate unions. The federation cited excessive performance bonus demands and other distributive bargaining, increased industrial-site confusion following the implementation of the revised Trade Union Act (the so-called "Yellow Envelope Act"), and the prevalence of radical struggles as major problems in Korean labor-management relations.
"Recently, cases in which the labor sector demands and fights for excessive profit-sharing, such as N% payouts of operating profit or net profit, are increasing," KEF Executive Vice Chairman Lee Dong-geun said with concern. In fact, the Hyundai Motor (005380.KS) union demanded 30% of net profit, and the Kia (000270.KS) union demanded 30% of operating profit, as performance bonuses in this year's wage and collective bargaining negotiations.
"The fact that even the overwhelming No. 1 company in the global automotive industry, amid an unprecedented sense of crisis, has seen its union take the lead in contemplating survival strategies and resolving to move first, leading to company-wide change, carries significant implications for our country's labor-management relations," Lee said.
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