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Korea’s Auto Industry Loses 10,000 of Its Workers This Year

Korea’s Auto Industry Loses 10,000 of Its Workers This Year

With Korea’s vehicle output falling rapidly, the number of employees in the automobile industry declined by about 10,000 this year. That is, about 1,000 workers per month have left the industry. As the automobile industry, which is a foundation of the Korean manufacturing industry, undergoes a crisis of “production cliff,” workplaces and jobs are disappearing at once, causing concerns that the trend could disrupt the nation’s industrial ecosystem.

According to the Korea Employment Information Service and the Ministry of Employment and Labor, the number of employment insurance policyholders in the automotive industry, reached a monthly average of 383,621 in the first 10 months of this year, down 9,115 compared with the same period of last year. The figure was the lowest since 2013, when the current data collection method began to be used. It was 2.3 percent down from the previous year.

The automobile industry is losing jobs most rapidly among domestic industries. The number of the industry’s employment insurance policyholders in September declined by 9,500 from the same month of the previous year, which exceeded the all-industry workforce reduction of 6,800 during the same period. Others industries increased their workers on a small scale, while the automobile industry cut its employees much more, reducing the pool of workers in the entire manufacturing business.

The reduction of workers in the automobile industry is attributed to a drop in automobile output. The number of domestically-manufactured automobiles from January to October this year totaled 3,266,698, down 0.7 percent from the same period of the previous year. Industry watchers say that it will be hard for Korean automakers to produce 4 million units a year, which is regarded as the minimum output required to support the industrial ecosystem.

The Korean automobile industry’s workforce showed an upward curve from 2015 (389,528) before exceeding 400,000 for the first time in 2017. Yet the shutdown of GM Korea’s plant in Gunsan and restructuring at other finished car producers caused the number to decline to 392,398 last year, with the downward trend aggravating this year.

According to statistics, companies supplying auto parts for finished car producers are losing more workers. The monthly average number of employees in the finished car makers registered 153,118 this year, down 2.04 percent from last year, while that of workers in auto parts companies posted 230,503, down as much as 2.51 percent during the same period.