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Hyundai Motor Group and Gwangju Metropolitan Government made a tentative agreement on Monday morning, but neither party has made any details. The resolution remains at the labor-management consultation meeting in Gwangju on May 5. If a joint resolution is adopted and Hyundai Motor Company accepts it, it will establish a new automobile factory in Korea in almost 20 years. 

However, a Hyundai source said,경륜  "After the city was fully authorized to negotiate job investment in Gwangju on June 27, the proposal was in close proximity to the draft of the agreement that was first proposed to Hyundai in June." 

According to Hyundai officials, the Gwangju-style job can be decided at a level where workers work 44 hours per week and receive around 35 million won per year. When the city of Gwangju proposed the same work style and demanded investment, Hyundai Motor believed that it would be able to secure profitability even if it had to entrust the supply to Hyundai if it had such working conditions. 

"The agreement can be somewhat different until the two sides sign the signing ceremony on June 6 at the earliest," said Lee Byung-hoon, vice mayor of the Culture, Economy and Economy Ministry in Gwangju. 

Also, one of the biggest issues in the job investment negotiation for Gwangju was the wage and collective bargaining. Hyundai Motor's management and labor are at odds over wage and welfare increases every year. On June 21, Hyundai Motor's labor union participated in a general strike organized by the Korea Confederation of Trade Unions (KCTU), a high-ranking organization, and set a record of seven consecutive years of strikes. 

In order to resolve the labor-management issue that determines the success or failure of Gwangju-style jobs, the city initially proposed a five-year grace period for Hyundai Motor and a wage increase based on inflation and economic growth. Last month, however, the Gwangju-style job negotiation was on the verge of collapse as the Gwangju-based investment promotion team suggested that wage and group negotiations should be held every year. Considering the process of such negotiations, the tentative agreement seems to contain measures to effectively delay wage and collective bargaining for at least several years. 

The two sides reportedly reached a compromise on "responsible management of labor and management," which were hot potatoes, and "to guarantee the unit price of subcontractors." Until now, the city of Gwangju had said that the board of directors recommended by the union should include one director. 

It has been decided that it will be a light sports utility vehicle (SUV). Both Hyundai Motor officials and Gwangju City Vice President Lee Byung-hoon confirmed that light-type SUVs are produced by Light Green National Industrial Complex. Code name QX is a vehicle that shares platforms with Hyundai Motor's European strategic hatchback (i20). 

However, if the new corporations that both sides invest in produce 100,000 small SUVs annually, the question is whether they will be able to do all this in the market. Hyundai Motor Company's third plant in Ulsan will also produce 100,000 light SUVs annually starting in January next year. If this happens, the market will have to exceed 200,000 units by 2021. According to the Korea Automobile Manufacturers Association, there were about 140,000 small SUVs in Korea last year. 

For this reason, the city of Gwangju demanded that the factory allocate electricity for the plant, but Hyundai Motor Group is said to be difficult to accept. 

Experts point out that even if Hyundai Motor Company's investment is attracted, its plant will not be able to continue if it lacks profitability. General Motors (GM) of the U.S. closed its GM Gunsan plant in Korea in May due to its low return on investment. 

"If we fail to secure sustainable profitability based on rational labor-management relations and salary structures, we will have to close our factories someday," said Sung Tae-yoon, an economics professor at Yonsei University.

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