Ssangyong Motor has decided to rehire 60 laid-off workers for the production of its new G4 Rexton SUV. The automaker, now controlled by Mahindra and Mahindra of India, brought back 456 workers overall from their unpaid leave in 2013.
Ssangyong’s move serves as proof that labor market flexibility can work. But they also give all parties concerned _ workers, management and the rest of the nation _ a pause to think about what has happened.
Ssangyong recorded a modest operating profit in 2007 and went into the red for the following seven years. The automaker had been sold three times: first to Daewoo Motor (now Tata Motor of India) then to SAIC of China and finally to the current owner. It also suffered from one of the worst strikes, which was plagued by clashes between workers and police for 77 days.
Then, it was only two years ago that the Supreme Court confirmed the legality of workers fired by the company.
Despite its bottom line still being in red, in 2013, the company hired those on unpaid leave, about a quarter of those who were let go of. It rehired 40 more thanks to the success of its small SUV Tivoli in 2015 and is rehiring 60 this year. Last year, it finally turned itself around to record a profit amid a seven-year streak of no strikes.
This is a rare success by which a bankrupt firm comes around thanks to the cooperation of workers and management and embraces the laid-off workers, showing other unions can let up on its strong opposition and make the labor market more flexible.
A spokesman told The Korea Times, “Much of this rehiring program is owed to the decision by Anand Mahindra, chairman of the owner group, who met with union representatives in 2015 and guaranteed their staged re-employment.” There was only one other memorable case of rehiring, which was by Daewoo Motor. “It would serve as an example for other automakers,” the spokesman said.
This story, however, needs a couple of loose ends to be tied up so it can qualify as a lesson in the advantages of labor flexibility. First, there are still about 1,200 workers who have been waiting for years for their turn to return to the Ssangyong workforce. Second, a number of former Ssangyong workers and their family members killed themselves, a case that is still remembered as one of tragic stories of Korea Inc.