Hyundai Motor Company Implements Age-Based Workforce Classification in New Car Factory Expansion Initiative

Hyundai Motor Company to Introduce Age-based Workforce Allocation in New Factory

In an effort to combat the aging of car manufacturing sites and provide young workers with opportunities to gain expertise in electric vehicle (EV) technology, Hyundai Motor Company has made the decision to allocate 30% of the workforce in their new domestic factory to individuals in their 20s and 30s. This marks the first time a large-scale manufacturing site in South Korea has implemented an age-based classification for production workers, and its success may pave the way for similar systems in other industries, including the automotive sector.

A recent labor-management wage and collective agreement passed by the Hyundai Motor Company union included provisions for the allocation of personnel in the new electric vehicle factory in Ulsan, set to be completed in 2025. According to the agreement, the allocation is as follows: 30% for workers under 39 years old, 40% for workers aged 40 to 49, and 30% for workers over 50. Additionally, elderly workers who are two years or less from retirement age at the time of mass production will be exempt from transfer.

This groundbreaking initiative aims to address the issue of age imbalance on the production site and create more opportunities for younger generations to acquire cutting-edge technologies. Previously, when multiple applicants vied for a transfer position, seniority was the determining factor, resulting in older individuals being selected first. By implementing an age-based allocation system, Hyundai Motor Company hopes to rectify this imbalance.

It is worth noting that the agreement was made for the new plant, not the existing production facility. Workers over the age of 50 in the old factory are assured of employment stability, even if they are not assigned to the new facility. As part of their transition plan, Hyundai Motor Company plans to hire new production workers annually. This year, they have already hired 400 full-time technical workers, with further recruitment planned for next year (800 people) and early next year (300 people). By equipping these new hires with knowledge and skills in EV production, Hyundai Motor Company aims to enhance their manufacturing competitiveness.

This development is not only significant in terms of workforce management, but also in the context of union dynamics. With declining union membership, allocating a workforce based on age may help garner support from younger workers. By striking a balance between the older and younger generations, the company hopes to foster a productive and collaborative culture on the production site, promoting the transfer of technology and knowledge.

Experts in the field are closely observing Hyundai Motor Company’s experiment, considering its potential implications for other companies planning to establish new factories. Cho Seong-jae, a senior researcher at the Korea Labor Research Institute, highlights the positive impact that a balanced workforce can have on production culture, specifically in terms of technology and knowledge transfer. The unique circumstances surrounding the establishment of the large-scale production facility and the innovative workforce allocation strategy make Hyundai Motor Company a company to watch in the manufacturing industry.

hyundai car factory [사진 = 연합뉴스]

Hyundai Motor Company has decided to fill 30% of the workforce of the new domestic factory being built for the first time in 29 years with young workers in their 20s and 30s.

This is to slow the aging of car manufacturing sites and expand opportunities for young production workers to acquire electric vehicle (EV) related technology. This is the first time that a workforce classification by age for production workers has been determined in a large domestic manufacturing site. If the Hyundai Motor Company personnel experiment is successful, there is a possibility that similar systems will be introduced in major manufacturing industries, including automobiles.

According to Hyundai Motor Company on the 19th, the labor-management wage and collective agreement that passed the union’s vote on this day contained ‘standards for the conversion of a new plant plan’. Labor and management recorded this in separate meeting minutes, not in the agreement.

According to the explanatory data of the minutes of the meeting obtained by Maeil Business Newspaper, it is intended to use an ‘appropriate ratio according to age’ when assigning personnel to the new electric vehicle factory in Ulsan, which will be completed in 2025.

Specifically, it is distributed as follows: ▲30% for those under 39 years of age, ▲40% for those between 40 and 49 years of age, and ▲30% for those over 50 years of age. In addition, elderly workers who have less than two years left until retirement age at the time of mass production are exempt from transfer of location.

A Hyundai Motors official said, “Previously, when many applicants wanted to transfer a position, we cut them in order of years of service, so there was a problem with elderly people being selected first.” This official explained, “If we allocate according to age group, the problem of age imbalance on the production site can be solved and more opportunities can be provided for the younger generation to learn new technologies.”

It can be interpreted that the reason labor and management were able to agree on experimental batch conversion standards was because the qualifying target was a new plant, not an existing production facility. Even if they are not assigned to the new factory, workers over the age of 50 in the old factory are guaranteed employment stability, so older workers have little resistance. Hyundai Motor Company has decided to hire new production workers every year, apart from the new plant plan transition period. This year, 400 new full-time technical workers (production workers) were hired for the first time in 10 years, and additional recruitment will continue next year (800 people) and early next year (300 people). If many of them acquire knowledge on the EV production site, which is the hub of future cars, Hyundai Motor Company’s manufacturing competitiveness is expected to further improve. From the union’s perspective, while the rate of union membership declines every year, allocating a workforce by age can also have the effect of gaining support from younger workers.

Cho Seong-jae, a senior researcher at the Korea Labor Research Institute, said, “If we can create a ratio between the older generation and the younger generation with many skilled workers, it can have a positive effect on creating a culture in production. site, including technology and knowledge transfer.” He added, “As this is a special case of building a large-scale production facility, companies with plans to set up a new factory will be keeping an eye on Hyundai Motors’ situation.”

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