Weak demand for electric vehicles is causing the employment outlook for the automotive industry, as previously presented, to deviate significantly. During the period when the electric vehicle market was rapidly growing, it was anticipated that the shift in production technology would lead to a substantial reduction in manufacturing personnel, but currently, the employment size of finished vehicle manufacturers has not changed significantly compared to that time.
According to a Hyundai Motor Group official on the 15th, the number of members belonging to the Metal Workers' Union Hyundai Motor branch is about 44,000. Of this, the number of production workers is estimated to be about 30,000.
This figure is significantly different from the projections made in May 2019. During the 'Future Outlook and Employment Changes in the Automotive Industry Forum,' held by Hyundai Motor's labor and management, Yoon Sun-hee, Head of Team of the Metal Workers' Union Hyundai Motor Branch's 4th Industrial Research Committee, predicted that "due to production technology changes from electrification and sharing economy, the production workforce would decrease by 40% by 2025," which caused a major stir in the industry.
As of 2019, the number of members in the Metal Workers' Union Hyundai Motor branch was estimated to be about 50,000, with production workers at around 32,000. If that forecast had materialized, the current number of production workers at Hyundai Motor would have sharply decreased to around 20,000, but the current workforce has only decreased by 1,000 to 2,000 compared to six years ago, indicating little change.
The reason for the forecast that the number of workers would decline sharply during the 2019 forum was based on the rapid growth of the electric vehicle market. Electric vehicles have far fewer components compared to internal combustion engine vehicles, and their assembly process is simpler. For this reason, it was expected that by 2025, the focus of the finished vehicle industry would completely shift to electric vehicles, and the production workforce would drastically decrease.
However, the growth rate of the electric vehicle market has significantly slowed. According to SNE Research, the combined sales of pure electric vehicles, plug-in hybrid vehicles, and hydrogen fuel cell vehicles in the global market in 2021 increased by 121% compared to the previous year, but it slowed to 54% in 2022, 35% in 2023, and 26% in 2024.
In addition to the decrease in demand, the slow development of battery technology is also analyzed as a factor leading to a divergence in employment forecasts. During the 2019 forum, experts predicted that by 2025, battery prices would decrease by 30% to 40%, but currently, prices have actually increased significantly.
Recently, Hyundai Motor, Tesla, Volkswagen, and several other automakers are increasing the application proportion of lithium iron phosphate (LFP) batteries, made from inexpensive iron phosphate instead of the ternary batteries made from a combination of nickel, cobalt, and manganese, to lower battery prices.
A Hyundai Motor official noted, "Although the types and quantities of electric vehicle production have increased compared to several years ago, there has been almost no reduction in personnel. In fact, with the sales of internal combustion engine vehicles being maintained and the demand for hybrid vehicles, which have complicated manufacturing processes, increasing, we are re-employing production workers who have retired beyond their retirement age."
During the 2019 forum, experts advised that in response to changes in production systems and workforce reductions due to vehicle electrification, labor and management should implement the 'high road' strategy focused on improving productivity and strengthening manufacturing competitiveness. The union also agreed on the need for a decrease in membership and re-education. However, as the forecasts for workforce reductions have diverged, the labor-management relationship at Hyundai Motor has not seen significant changes.
Ahead of the wage and collective agreement negotiations starting this month, the Hyundai Motor labor union has confirmed demands for a basic salary increase of 143,000 won, a 30% performance bonus based on last year's net profit, a 900% holiday bonus, and extending the retirement age to 64. It is also reported that they are reviewing plans to introduce a 4.5-day workweek without pay cuts and to implement a progressive retirement benefit system that adds service years for long-term employees.