BUSINESS

Auto parts maker demand more leeway on wage, working hours

By Catherine Chung
  • Published : Aug 9, 2017 - 16:14
  • Updated : Aug 9, 2017 - 16:14
South Korea's auto parts businesses on Wednesday demanded the government give more leeway in terms of regulations on wages and working hours, claiming the industry is currently facing tough challenges at home and abroad.

The Korea Auto Industries Cooperative Association, the Korea Academy of Motor Industry, and the Foundation of Korea Automotive Parts Industry Promotion released a joint statement, saying the government should lend support to help local firms currently struggling with falling exports.

According to the organizations, South Korea's production of cars fell 7.2 percent on-year in 2016 to become the world's No. 6 player. The country's export of cars came to 1.32 million units in the first half, the lowest tally since 938,837 posted in 2009.

(Yonhap)

Exports to China also dropped sharply due to the diplomatic tension between Seoul and Beijing surrounding the deployment of an advanced US missile defense system in the country, they added.

"Small and medium-sized business partners producing auto parts, which account for half of all sales, are suffering from falling earnings and sluggish operation," the organizations aid.

The organizations also claimed the on-going debate over standard wage may also rise as another challenge for smaller firms.

The standard wage is important because it acts as the base measure for calculating the pay rate for overtime and severance payments. A South Korean court earlier ruled that all types of bonuses, if given uniformly and regularly to workers, must be viewed as being part of standard pay. Major firms, including Kia Motors Corp., have been reluctant to accept the ruling.

Workers of Kia Motors are currently in a legal battle with the company.

The government's plan to reduce maximum weekly working hours to 52 hours from the current 68 hours will also have an adverse impact on the companies, they claimed.

"The government, the parliament, and the court should make a careful decision on key issues such as working hours and standard pay by considering the negative impact on the automobile industry," the organizations said. (Yonhap)