Inside A Little Tiger
issue 204 - February 1990
Inside a little tiger
Hong Kong, Taiwan, Singapore and South Korea are often
called the 'Four Little Tigers' because of their incredible success
as exporters. Joe Freeman spends a day inside South Korea's
biggest car plant to see what life is like for the workers
behind a Third World 'economic miracle'.
7.30AM. Waiting at the bus stop outside the vast Hyundai industrial complex in Ulsan, in the south-eastern corner of South Korea. The first bus is full. Not even a few inches of standing space. The second bus is full too. The man in the queue next to me begins to look anxiously at his watch. All around, young women and men in grey uniforms hurry to work, on foot, by bicycle, by bus. We are heading for Hyundai Motors, a couple of miles down the road.
There is space on the bottom step of the third bus. We gradually squirm our way to the centre as it moves off. Someone with a seat offers to hold my bag on his lap. I feel conspicuous, out of place with no uniform and no assembly-line job to go to. It is morning rush hour, and I am squeezed among the people who have fuelled the engines of South Korea's economic miracle' for the last two decades. Most of Hyundai's 100,000 workers are employed in Ulsan, and the majority of them seem to be on the streets this morning.
The bus travels through the company town built around the plant. All the factories belong to Hyundai, but so do the schools, houses and shops. We pass under the concrete arch which marks the exit from Hyundai Heavy Industry. Company apartment blocks line one side of the road, Washing hangs from window ledges and balconies. Each identical block has a large number painted in black on the side; once the number reaches into the 20s or 30s, the counting starts again. I wonder how a visitor unfamiliar with the area ever manages to find the right address.
A Hyundai primary school is on the left, followed by the 'Hyundai School of Foreign Languages'. On the other side of the road, trade unionists distribute leaflets to workers as they enter Hyundai Engine. The road reminds me of a main street lined with department stores - every plant is like a different store. Through the gates of each plant complex I can see not cosmetics or household goods but ranks of factories, offices, car parks, test tracks. Above them are forests of cranes reaching high into the sky, all adorned with the name of the store - Hyundai. We pull up by the 'Welcome to Hyundai Motor Company' sign, and elbow our way off the bus.
The bus ride had felt strangely familiar. I was brought up in a motor-industry town where the air rang with sirens marking the time for workers in their thousands to enter or leave the car-plants. The sight of early-morning workers swarming into industrial buildings does not seem 'unique' or 'exotic', even in this historically isolated country: it is common to heavily industrialized countries the world over.
Hyundai is now one of the biggest chaebols, or domestically-owned concerns, in Korea, worth over $20 billion. Founded in the mid-1950s after the Korean War by Chung Ju-Yung, who had a poor background and only high-school education, it is now a vast conglomerate of 27 companies. It makes computers and elevators. It has credit, construction and electronics projects. It makes over half the country's new cars and has sales reaching over twice the value of its nearest competitor. And it is on the move internationally - it has opened a production plant in Canada.
Kim Naw Woo, our guide around the car plant, is in his early 30s and taller than most Koreans. At the outset he is quite formal, but he soon relaxes and becomes as convivial as other Koreans I had met. He leads us to the car production-line.
My senses are confused by the blur of orange and yellow robots twisting, turning and spraying sparks into the air. Workers repeat welding jobs on the outside of the car, or climb in and out to rivet the dashboard or stretch the upholstery into place. Alleyways run between the lines, just wide enough for small trucks pulling parts around the plant. I keep an eye out for them. They don't stop for visitors. The assemblers work hard, through their cycles of repeated welding, reaching and shuffling movements, but the pace is not so fast that it prevents snatches of conversation above the continuous noise.
The engine plant is even more noisy and there is an oily smell in the air. This is where Kim works. He is clearly proud of his work. 'I am a trained technician, and can run this machine single-handedly'; he points to a machine 15 metres long. It contains at least three sub-machines.
'Hyundai employs an educated work-force, and gets good results,' he explains. 'I went to technical college, and enjoy working these big machines. My problem is that I am active in the trade union and this makes the company nervous. Sometimes they move me onto smaller machines to keep me out of the way - but that work is so easy I could do it in my sleep!'
Midday. Queues form rapidly outside the canteen. 'The meal break is only half an hour so we need to eat fast to have any time to relax', Kim comments. Union members distribute leaflets to workers as they enter; the union is still quite new and there is no lack of interest. Hyundai's workers are tired of working long hours to earn the company's profits without reasonable compensation.
Choi Jin Kook, a friend of Kim's, joins us in the queue. I can smell the sweat on his grey jacket. The 'Safety First' patch sewn to his breast pocket is partly torn away. I ask about working conditions. 'They are hard, but there are more accidents in the small companies which supply parts to Ulsan.
'I earn 600,000 won ($950) a month,' he says, as we sit down, with rice, kimchi (hot pickled cabbage) and vegetable soup. 'That's not great and I have to work many hours of overtime to get it. But all the same, I think we are the best-paid manual workers in Korea. The union has been important - we had a 20-per-cent wage rise this year.
'It's enough to live on, but living conditions are not good around Ulsan. The company apartments are too small, and there are too many people in one small town. But then again it is because so many workers are here that we have forced the company to deal with the union.'
The conversation turns to the future. Will higher production targets mean new plants and more jobs? 'The company is talking of splitting the plants, moving parts to different areas of the country, Kim replies. The 'Future Plans' section of the company brochure reveals that Hyundai has set up a company to build advanced robots, with the intention of using less labour-intensive production methods in the future. Hyundai workers may in the near future experience the problems of unemployment, new technology and work reorganization that workers in Western countries have faced already.
Lee Sang Bum, president of the Hyundai union, is a slight, mild-mannered man in his late 30s. He has worked in the plant for 10 years. He is the leader of the biggest factory union in the country but he's approachable and sincere. We sit and talk among trees on an area of grass just inside the main factory gates, where preparations are also in hand for a major union rally. A huge union banner, showing workers marching and labouring, billows in the wind behind the newly erected stage. Slogans on the banner bear out members' commitment to the union, as you would expect: 'Advance the Democratic Union' and 'If We Divide, We Shall Die'. But they also testify to a feeling for their work which seems rather strange to Western eyes: 'My Love, Hyundai Automobile'.
'The company is very anxious about the union,' says Lee, with a slight smile. 'It is true that things have moved fast - we tried to organize unions before 1987, but it was only in that year, as part of the nationwide outcry for more democracy, that we managed to form the union.'
'Our demands are for better workers' conditions and rights, and more democracy in the plant, the unions and the Government. It is not enough just to demand more pay: the company and the Government must be forced to recognize the real rights of workers. This is starting now - most of the plants in Ulsan now have unions.'
Lee is on the move, apologizing that he has to attend an urgent meeting. Things are changing, moving fast. No doubt the challenges currently facing both the company and its workers - labour relations, trade, overseas investments - will change too. But I get the feeling the union is here to stay. We return to the bus and this time have no problem getting a seat. The reason - it's only six o'clock and the evening rush hour doesn't start till eight.
Joe Freeman is a trade-union researcher who specializes in international affairs.
Indian cars - a joke no longer
Muthu Krishnan is Chair and Managing Director of his family firm, UCAL Carburettors, in Madras. Neither he, nor his company, fits the Western stereotype of India.
A few years ago, Muthu Krishnan was attending a trade fair in England. He was asked if he could reproduce Victorian cast-iron pub furniture. No-one in the UK could do it any more. Nor, at the time, could he. But on his return to Madras he set up a furnace. Soon he was sending consignments of the furniture to England. It proved to be a very profitable business. He says that now, whenever he goes to a pub in England, the birthplace of the Industrial Revolution, it gives him enormous satisfaction to see his own contribution to its cultural heritage standing in the garden.
Muthu is a tall, powerfully built, sharp and amiable man. In addition to his business interests, he is also President of the Madras Motor Sports Club. He's been heavily involved in setting up India's first motor-racing track at Sriperumudur, 40 kilometres from Madras on the highway to Bangalore. This is the birthplace of Sri Ramanuja, the founder of the Visisthadwaitha school of philosophy. Muthu Krishnan uses the race track to test his components, and sees the philosophy of quality and reliability in sophisticated products that he advocates spreading through India like the precepts of Sri Ramanuja.
He talks casually and confidently about his business, which employs some 600 people. 'I've been around for a long time,' he says, 'and I've never come across the sort of opportunities that are coming our way now, both in terms of growth within the country and also in exports.' He expects to send at least 30 container-loads of carburettors to the specialized Australian market this year, and also does a lot of business with Aotearoa / New Zealand. Now he's looking at Europe.
'Going abroad and selling brings a lot of sophistication into the company', he says. 'We are now starting to get "global". Many, many companies in India are doing this. The leading car manufacturer in India, Maruti, makes a Suzuki car. They've just exported 500 cars to France. Mico, the Bosch licensee in India, have been exporting back to Germany.'
For 30 years the Ambassador motorcar, based on Britain's Morris Oxford, remained almost unchanged as the standard Indian vehicle. But in the mid-1980s, the Indian Government changed tack. 'They decided to open the doors to modernization,' says Muthu. Japanese companies set up factories designed to produce components and whole cars not just for the Indian market but for world markets too. Now companies like UCAL are entering complex joint ventures and using the latest manufacturing technology.
New perceptions have opened up unexpected possibilities. 'We are now in a position to export know-how - to Africa, for example,' he says. 'We've set up a whole plant and run it for them for three years, taught the people how to do it. It's been a very challenging venture. In Europe or Japan the emphasis is entirely on mass production. But in India we still remember how to make smaller quantities of components, where labour and import substitution are important. I personally foresee a lot of growth in this area.'
Muthu now wants his company to increase the 'value added' element of its work by making sophisticated products like high-pressure pumps. He foresees a time when Indian companies will be competing successfully with South Korean and even Japanese industry. UCAL spend much more now on Research and Development and run their own training programme.
He talks approvingly of the way Indian Government policy has encouraged 'total manufacturing' rather than simple assembly of cars in India. 'After 30 years of industrial development, India today is at something of a crossroads,' he says. 'Come to the engineering trade fair in Delhi. You'd be surprised. Many Indian companies have achieved far more than we have.'