The financial crisis that began in the U.S. in 2008 dealt a severe blow to the American economy.
During the recovery process, financial institutions and IT companies saw significant growth, while the manufacturing sector did not benefit much.
This led to rising dissatisfaction among white workers, which contributed to Ronald’s election victory.
From his candidacy, Ronald claimed he would prioritize American workers, and we built factories in the Rust Belt to fulfill his promises.
CNN and NBC, which Ronald labeled as “fake news,” were keen to find faults in him and showed significant interest in the recent CarOS labor negotiations.
Ronald and I are in the same boat. If we exert any pressure on the union, they will immediately release aggressive articles.
Companies supporting Ronald, claiming they would create jobs for American workers, would end up oppressing those workers.
Therefore, we found it challenging to respond strongly against the union. The union is also aware of this, using the threat of a general strike to apply pressure on us.
We have no intention of repressing the union, but we also won’t concede to unreasonable demands.
Once we start being dragged around by the union, we could end up like Eunsung Motors. Eunsung has overseas factories, but we have all our plants in the U.S. So, we must negotiate with principles rather than focusing solely on immediate profits.
In a way, this might be a blessing. If problems had arisen after a new car was launched and sales rose, it would have been even harder to respond.
Conversely, with the sales network collapsing and sales plummeting now, it’s the best time to negotiate with the union.
Dennis glared at me with an intimidating look, arms crossed. I saw beads of sweat rolling down his shiny bald head.
He was probably shocked. He likely didn’t expect me to respond as if they could strike if they wanted to.
Michael, the union representative who resembled The Rock, sitting to Dennis’s left, spoke up.
“Are you really okay with a strike?”
I shrugged.
“Of course, it’s not that simple. If production halts amid falling sales, the company could go bankrupt.”
They are well aware that the company is currently facing significant losses.
While Eunsung Motors could survive a year of strikes, CarOS is a different story. If losses increase and more funding doesn’t come in, we could genuinely go under.
Dennis shouted angrily, “Isn’t the situation this way because of the management’s failures? Do you understand the immense suffering workers are going through due to inadequate management?”
I empathize with that sentiment.
Ronald is implementing manufacturing promotion policies, including revising various free trade agreements, but there is still a significant shortage of quality manufacturing jobs.
If the company collapses, it will be nearly impossible for CarOS’s workers to find better jobs than they have now.
I leaned forward and said, “I assure you of one thing: even if the company goes bankrupt, I will not lay off a single worker until that happens.”
Workers’ livelihoods depend on their wages. Losing a job can be equivalent to a death sentence for some. This is why workers occupied the factory and protested during the Cheongryong Automotive layoffs.
Looking back, including the Eunsung Motors union, Korean automobile unions were not as militant in the past. However, the 1997 IMF crisis completely changed labor relations.
At that time, companies pushed workers who had dedicated decades to the company onto the streets under the guise of restructuring.
The few survivors witnessed their colleagues and seniors being laid off. From this point, auto unions began to fight for immediate benefits rather than considering the company’s management situation.
In essence, all problems started with layoffs.
“My father ran an automotive parts company. It was a small business with few employees, but he never laid off a single worker until it closed. That was his greatest pride. No matter how tough it gets, you can’t abandon your family, right?”
My words softened the expressions of the union representatives a bit.
Daryl calmly spoke in a persuasive tone. “These are difficult times. I believe there are great concerns about the company’s future due to declining sales. We are doing our best to develop new cars, aiming for a launch before the end of the year. By then, sales should recover.”
“How do you propose to recover sales when the dealers have turned their backs and the sales network has collapsed?” I challenged him.
“Were cars selling well when the sales network was intact?”
Dennis struggled to answer. Until recently, they had barely continued sales by reducing the variety of models and increasing margins for the dealers, dodging deficits.
How long could that last?
“It’s better than now. Do you know how many production lines are currently halted?”
“I know. I checked before coming here.”
When the production line stops, workers have nothing to do. They are currently undergoing vocational training offered by the company.
You might think that it’s nice to be training without working, but surely, there’s the anxiety of not knowing when one might be fired.
“Don’t worry too much. We plan to sell the new cars directly in the future.”
“How do you mean?”
“Online. It’s a world where everything is purchased online, so why shouldn’t cars be included?”
Dennis looked astonished.
“Do you think it’s as easy as it sounds?”
“If Nikola can do it, there’s no reason we can’t.”
Nikola was able to sell directly without going through dealers from the beginning because they had the differentiated selling point of electric vehicles.
We also have a clearly differentiated selling point.
“As you know, CarOS started as a company developing autonomous driving software. We will launch new cars equipped with that technology. We are the only company producing Level 4 autonomous vehicles. If we provide enough value to our customers, we can sell without going through dealers.”
This will increase our profit by the margin typically taken by dealers.
“My goal is simple. Develop great cars, produce them in the U.S., and sell them around the world. The automotive industry is changing rapidly. Nordic countries are poised to ban the sales of internal combustion engine cars within ten years, and all companies are hastening the development of future cars. We need to move ahead of that.”
The new car to be launched is CarOS’s first and last internal combustion engine vehicle.
The new factories under construction are all to be electric vehicle plants, and existing factories will also convert to electric vehicle production in the long term.
Even for the same automobile, there are significant differences in the production methods between internal combustion engine cars and electric vehicles.
“The number of parts in an internal combustion engine car reaches 30,000, while an electric vehicle has only about one-third of that. There’s no engine or transmission. With fewer parts, the assembly process will decrease, which will lead to a significant reduction in the number of workers in the factory.”
This is not just an issue for automotive factories. With the advancement of the 4th industrial revolution and technology, quality manufacturing jobs are declining globally.
“To maintain current employment, we need to produce more cars. For that, we must have the cooperation of the union.”
Ross, the union representative, resembling Brock Lesnar, said, “The workers’ wages and jobs don’t matter to you; you’re just thinking of making money, right?”
“Stop it, Ross.”
Dennis intervened, thinking the comment was too harsh.
I nodded.
“That’s correct. I am an investor, and I like money. The reason I invested a large sum in CarOS was not for charity, but for profit. However, I have no intention of siphoning money earned from new cars to OTK Company. I will invest all the money made from new cars into electric vehicles. This way, I will build more factories and hire more Americans. The benefits will be distributed not only among you but also to the workers of our partners. I’m sure everyone remembers President Ronald’s speech here in Detroit during the election. I am eager to contribute to increasing jobs in America.”
The union members showed subtle expressions regarding my words.
Unions are interest groups for workers belonging to those organizations. Even if companies hire more staff and take care of partner workers, it does not benefit those currently belonging to the union.
Yet, it wouldn’t be easy for them to demand only their wages be raised, neglecting other workers.
The reason the public criticizes the Eunsung Car union isn’t because they receive high wages.
There are many professions, such as IT and finance, which pay even more. There’s no law saying that automobile production jobs must have lower salaries than those.
The issue is that the Eunsung Car union fights only for the benefits of Eunsung’s regular staff. As wage increases and benefits grow, the company has felt a strong burden in hiring more permanent staff.
As a result, Eunsung no longer builds factories in Korea and hasn’t increased regular employment. Instead, they have built factories abroad and hired non-regular and dispatched workers.
Non-regular and dispatched workers receive only a third of the wages of regular workers even though they do the same work. The wage gap with partner workers has continued to widen. Viewed from another perspective, the union’s wage increases for its members are squeezing the wages of other workers.
Dennis shook his head.
“Will the company be able to hold out until then? Where’s the guarantee that the factory won’t close if things don’t go as planned?”
I stated firmly.
“I guarantee it.”
The union members’ gazes shifted toward me in unison.
“If necessary, I will fund it by issuing bonds from OTK Company. I am willing to do anything to protect the company.”
Strictly speaking, I am not part of CarOS’ management but the majority shareholder with 96% ownership. I am also a partner who owns battery companies and research institutes connected to CarOS, and a lender bringing funds.
As I made my clear determination, the union members could no longer say anything on the matter.
“Now, let’s start discussing the demands,” Ryan said.
“Out of the 21 demands, we cannot accept the items related to management. Also, given the current financial situation of the company, wage increases are also difficult.”
In response, Dennis immediately countered. The back-and-forth between the management and the union continued. There weren’t many points of agreement, and most did not narrow the differences, remaining at an impasse.
After more than four hours of negotiations, everyone began to tire.
We could take a short break and then resume, but…
“I think it would be better to discuss the details next time. That way, it’ll look like I’ve actually accomplished something by coming to the U.S.”
At my words, a few chuckled.
This was also directed at the union representatives. Long, drawn-out negotiations that conclude dramatically often appear more favorable.
Things that are hard-earned tend to seem more valuable than those easily obtained.
From their perspective, the narrative of “the management readily conceded” would not hold as much prestige as “we fought hard to achieve this.”
Noticing my intent, Dennis and the union members stood up.
“I’ll see you at the second negotiation.”
After they left, I finally exhaled the breath I’d been holding.
“Ah.”
I had acted nonchalantly during the negotiations, but the pressure was quite intense.
Rather than worrying about the company collapsing due to failed negotiations, the fear that a single blow could be fatal loomed larger.
Isn’t it kind of unfair for them to come to the negotiation table with that kind of physique?
I was trying to wipe my forehead with my hand, only to find my palm soaked with sweat.
Ellie smiled and said, “You did well. Watching you negotiate, you could really be a lawyer.”
Daryl, seemingly nervous, wiped his sweat with a handkerchief and said, “You did a great job.”
I patted his shoulder. “Comments like that are for after we’ve completed the negotiations.”
