After the first round of negotiations ended, requests for coverage from American media followed.
CEO Daryl stated, “We are doing our best to negotiate,” while union chairman Dennis maintained a tough stance, emphasizing that “the possibility of a strike depends on the company’s attitude.”
The second round of negotiations was scheduled for a week later.
I spoke with Taek-gyu around lunchtime. It would be early morning in Seoul, but he usually stays up late.
[Is work going well?]
“We’re in negotiations. Nothing much happening at the company?”
[That’s good.]
With Taek-gyu holding down the fort and Henry and Sang-yeop handling the practical matters, things should be running smoothly even in my absence.
[When will you be back?]
“It seems like it’ll take a while.”
[Come back soon. It’s boring alone.]
“……Okay.”
I hung up and re-entered the meeting room. Ellie was reviewing documents with one hand propping up her chin and the other twirling a pen.
I said to her, “I’m sorry. I brought you all the way to America just to work.”
Upon hearing this, Ellie lifted her head.
“It’s fine. I came here to work, after all.”
My original plan was to finish work reasonably and then drive around Lake Superior and Niagara, but the reality is that I’m overwhelmed with tasks.
This is already my third trip to the U.S., and I haven’t had a chance to properly tour anything.
“Coffee’s here.”
When someone brought coffee, we each picked up our orders.
I took a sip of my coffee, enjoying a moment of rest. The words “Research & Development, Production, Sales” that I had written on the whiteboard were still there.
The headquarters handles research and development, factories manage production, and dealerships take care of sales. However, just because sales are separated doesn’t mean that research and production must be distinct as well.
Thinking back, the separation of research and production has been in place for a long time.
Car companies, except for several key components like engines, outsource the production of other products to numerous suppliers.
In this process, approximately 70-80 percent of the total operations are already completed.
The car factory’s role is similar to assembling Lego blocks, where it assembles delivered parts into a finished product.
There’s no rule that the assembly process must occur in factories owned by the final vehicle manufacturers, right?
In actuality, some car types are entrusted to be produced at different companies’ factories. This allows them to release and sell cars without owning a factory.
I recalled the union representatives I saw during the first round of negotiations.
They felt the fear that the factory could close at any moment, depending on the company’s circumstances. This fear was justified, as they had witnessed factories closing and workers being laid off during the financial crisis in the U.S.
In the case of CarOS, a software company acquired an existing car manufacturer, creating a structure where it’s easier to separate research and development from production.
While sales are declining, new factories are being built. Naturally, existing factory workers must feel job insecurity.
GM withdrew from factories in India and Indonesia, sold its subsidiaries in Thailand and Russia, and recently even closed its Australian factory.
This clearly showed that the headquarters can shift production bases wherever profit is pursued.
Consumers don’t care where the cars are produced, and shareholders may be pleased if profitability increases, but what must the workers who suddenly lost their jobs feel?
Ellie came closer to me and asked, “What are you thinking?”
“I’m considering how to persuade the union. What if we pressure them by saying we’ll close existing factories, discontinue current vehicles, and outsource production of new models elsewhere?”
If this happens, a strike by the union would lose its meaning. If we say we’ll provide production volume, there would be plenty of places that would welcome us with open arms.
Ellie chuckled at my suggestion. “Do you really think you can do that?”
After a moment’s thought, I shook my head. “I think it would be difficult. It’s just not my style. After all, those people go home and are heads of households. They likely have loving spouses, children to raise, and loans to repay.”
Right now, I find myself in a managerial position by chance, but I don’t have difficulty understanding the perspective of the workers.
Labor-management relations are ultimately human relations. Even when in conflict for each other’s interests, shouldn’t respect and understanding be the foundation?
Ellie said with a wink, ‘You know? It’s those aspects of Jin-hoo that I find attractive.’
I scratched my head, feeling shy.
‘Isn’t it hard?’
‘Compared to working under Jessica, this is just a piece of cake.’
‘…….’
Aren’t the Golden Gate employees the ones who really need to strike?
***
The second round of negotiations began.
We sat across from each other at the negotiation table again. Even now, it’s still an unadaptable physical presence.
What kind of work in a factory creates that level of muscle?
Dennis came out strong from the start.
‘Since we can’t do overtime or special shifts, shouldn’t you compensate for that?’
Daryl shot back.
‘So, if overtime and special shifts increase later, will you lower the base salary then?’
That’s completely out of the question. Once wages go up, they never go down.
Sure enough, Dennis said, ‘That’s something we can think about later.’
Before we took over, Chrysler’s sales had been very poor. Compared to the other Big Three, GM and Ford, it was almost embarrassing, and within the FCA group, it was treated like the ugly duckling.
Since the sales slump had persisted for a long time, the wages and benefits that current workers received were lower than those in the same industry. That’s why they were fighting like this.
Hours into the negotiations, the disagreement remained unresolved.
The union demanded wage increases and better benefits, while the management pulled out the company’s financial statements, saying it was difficult. The union mentioned the management’s failures and requested a chance for employee participation in management, which the management dismissed as nonsense.
At this rate, even negotiating all day wouldn’t yield results.
I pondered.
Once the new car is released, profits will significantly improve. However, those profits will need to be reinvested in electric vehicles.
For the next few years, the cycle of reinvesting profits would likely continue.
Why wouldn’t I want to treat our company’s employees well?
It’s natural for the fruits of growth to be shared not only with shareholders and management but also with the workers. Treating workers well and nurturing their potential ultimately increases the company’s value.
The problem is that it’s tough right now…
Finishing my thoughts, I spoke up.
‘Let’s do this. We will raise wages by 6 percent every year. The same goes for various allowances. We will gradually increase benefits like vacation pay, children’s tuition, and medical expenses to match above the industry average.’
Dennis fell silent while Daryl shouted in surprise.
“Representative!”
I continued speaking without paying heed.
“But due to the current state of the company, immediate implementation is impossible. We will need to set a timeline…”
Bang!
Dennis slammed his fist on the table and shouted.
“I’ve heard promises like that countless times! You say you’ll do it later, then change your mind. Do you think I’ve only seen that happen once or twice?”
I quickly continued before a punch came my way.
“Let me rephrase. We will implement the basic salary increase and bonus increase in two years, regardless of the company situation. The raised amounts will be paid out all at once after two years, and the increase rates will also be applied cumulatively. Although we can’t retroactively apply benefits, I will make sure they are at least competitive.”
Dennis looked taken aback by my words.
I joked.
“I know how hard the auto factory workers work. If I were asked to work, I wouldn’t last half a day before collapsing.”
Fortunately, a few laughed lightly, easing the atmosphere.
“I will do everything I can. But the union must also cooperate with the company. This is a critical time where labor and management need to unite. Management will handle the management side, but we absolutely need the workers’ help with production.”
Significant changes are coming to the automotive industry.
We must adapt quickly to these changes. Companies with rigid labor structures will be eliminated, while those that respond flexibly will survive.
The union representatives looked bewildered, perhaps not expecting me to make such concessions.
I said to them, “So, shall we draft the negotiation plan now?”
***
After 15 hours of negotiations, we reached a compromise.
First, we fully accepted the union’s demands regarding a ban on layoffs, job security, and extending retirement age. My proposal to implement wage increases and benefits starting in two years was accepted by the union.
The management will decide on issues like the transfer of production lines and employee training, but the union will cooperate as much as possible, agreeing to work together on various measures needed to enhance productivity.
Another crucial point is that if the company faces danger, the majority shareholder, OTK Company, will invest to provide support.
Union Chairman Dennis Block took the proposed agreement for a vote, and nearly 90% of the members approved it, allowing the plan to pass.
It was a clear sign of trust in the management.
CEO Daryl and Union Chairman Dennis signed the agreement and shook hands, successfully concluding the negotiations.
The next negotiations will be in four years, allowing for some relief until then.
During the negotiations, CNN and NBC, which had been diligently interviewing workers, published only brief articles once the deal was finalized.
In contrast, the local Fox News covered it as a major story and provided positive feedback. For the record, Fox News is pro-Republican and pro-Ronald, unlike CNN and NBC.
[The CarOS labor-management agreement is a model of labor-management cooperation!]
[The company promises wage increases and job expansion, while the union commits to enhancing productivity.]
[Opening the path to coexistence for CarOS labor and management.]
Ronald quickly tweeted a link to the article despite being in Europe.
[Welcome to the CarOS labor-management agreement!
The American auto unions are different from the Korean Eunsung Motor Union that only strikes.
American workers are always ready to talk with the management for more jobs.]
He also posted a graph comparing wages and productivity between Eunsung’s Georgia factory and the Ulsan factory. It was clear that the Georgia factory had lower wages but higher productivity.
In short, it was a message urging to build factories in the U.S. because American workers excel.
– Now even Ronald is criticizing the Eunsung union.
– Honestly, the Eunsung union should reflect. It’s amazing how the company isn’t failing given their actions.
– Eunsung’s management and union behave the same way.
– Last year’s strike, the year before’s strike, and another strike this year. I’m betting my entire fortune on the strikes next year and the year after.
– Isn’t the annual salary for production workers at Eunsung Motors nearly 100 million won? I also want to work at Eunsung Motors.
– The funny thing about Eunsung Motors is that they go to great lengths to destroy the union of their partner company, Woosong Corporation, yet they can’t do anything about their own union.
Suddenly targeted, the Eunsung Motors union strongly protested, issuing a detailed rebuttal in a press release.
They argue that, strictly by base salary, wages in Korea are low, and due to the characteristics of Korean factories primarily manufacturing high-end vehicles, it’s unreasonable to uniformly apply HPV (Hours Per Vehicle).
They officially demanded an apology from Ronald under the union chairman’s name.
– The Eunsung Motors union chairman demanding an apology from the U.S. president is something else entirely.
– Can the union achieve what even the president cannot?
– Are you watching, Ronald? There is someone here with more power than you.
– Bow down, Ronald. This is the level of you and the Eunsung Motors union!
– (Attached photo) Here are the pay slips for workers at the Georgia plant and the Ulsan plant. Base pay is slightly lower in Korea, but overtime and various allowances are overwhelmingly higher. When comparing national income and average worker wages, the gap increases further.
The Eunsung Motors union chairman’s demand for an apology became a viral sensation online, spawning various parodies.
Even conservative Korean media mentioned Ronald’s tweet, urging a cessation of unreasonable strikes and the need for cooperation between labor and management, yet despite this, the Eunsung Motors union announced plans for strong action again this year.