The Formalization of Informal Workers at Hyundai Motor Company

On December 17, 2017, Bu-Young Ha, a union chief at Hyundai Motor Workers’ Union (HMWU), announced that the union won a concession from management: Hyundai Motor Company (HMC) would hire 3,500 nonregular workers as regular workers. ¹ Combined with the concessions won through special negotiations in 2014 and 2016 by his two predecessors, Kyung-Hoon Lee and Yoo-Ki Park, a total of 9,500 contract workers at HMC were to be converted to permanent employees by 2021. ² As South Korea's largest automaker and the lead firm of Hyundai Motor Group, the world's fifth-largest automobile conglomerate, HMC, which is based in Ulsan, South Korea (hereafter Korea), has departed from the general worldwide tendency in the neoliberal era toward casualization of the workforce. Not only have most nonregular workers at HMC improved their material welfare but they have also successfully converted their employment status from precarious to permanent in the first two decades of the twenty-first century.

The trend toward the “formalization of labor” at HMC also contrasts sharply with the trend toward the “informalization of labor” at Hyundai Heavy Industries (HHI), the world's largest shipbuilder, also based in Ulsan. Figure 1 shows the divergent trends between HMC and HHI after 2003. Specifically, the percentage of nonregular workers at HMC decreased from 23 percent in 2003 to 8 percent in 2016, while it increased at HHI from 40 percent in 2003 to 71 percent in 2015. Figure 2 indicates that the wage gap between regular and nonregular workers narrowed at HMC in the past two decades, whereas the wage gap widened at HHI during this period.

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Figure 1.

Proportion of nonregular workers to total workers at HMC and HHI, 1990–2016. Note: Nonregular workers are hired by the in-house subcontracting firms located inside the factories or shipyards. They are not permanent employees of Hyundai-owned firms. Sources: See Appendix A (Appendixes A–D available online).

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Figure 2.

Wage inequality between regular and nonregular workers at HMC and HHI (unit: 10,000 Korean Won). Notes: The bars indicate the average annual wages of workers. I compare the wages of regular and nonregular/informal workers in the same workplace with the same years of work experience. For example, nonregular workers at HMC received 64 percent of the annual average wages of regular workers in 1995. Owing to the lack of firm-level data in 2004, I use the government survey on the nine major shipbuilding companies in Korea. Source: See Appendix A.

This divergence between HMC and HHI is especially puzzling since both firms had a similar proportion of nonregular workers in the early and mid-1990s and the size and proportion of contract workers greatly increased in both firms during the late 1990s and the early 2000s. HMC and HHI are run and controlled by Hyundai chaebŏl, one of the largest family-owned conglomerates in Korea, and share similar historical legacies of rank-and-file militancy and autonomous unionism dating back to the Great Workers’ Struggle in 1987. ³

This brings us to our central question: Why have automobile workers at HMC been more successful than shipyard workers at HHI as well as workers in other auto assembly factories such as General Motors (GM) Korea not only in limiting the spread of precarious work but also in narrowing wage inequality and converting nonregular/informal jobs to regular/formal ones? How can we explain these divergent outcomes? Under what conditions can workers overcome the dualization of the workforce?

To answer these questions, this article investigates accommodation and resistance to the dualization of the workforce at HMC. Through shadow comparisons with the shipbuilding firm (HHI) and another auto assembly firm (GM Korea), this article seeks to identify factors that help explain the formalization of informal workers at HMC.

I argue that part of the explanation for the different trajectories followed by HMC and HHI can be found in differences in the organization of production and the labor process in automobile and shipbuilding industries. Continuous production on the auto assembly lines created favorable conditions for precarious workers to organize disruptive strikes, whereas discontinuous production at the shipyards made employers less susceptible to strikes, limiting the workplace bargaining power of workers. Moreover, the relatively deskilled labor process at HMC compared to HHI meant that informal/precarious workers could gain expertise quickly, win the respect of fellow workers, and emerge as organic leaders on the shop floor.

However, these structural differences in the organization of production and the labor process, although an important part of the explanation, cannot fully explain the success of HMC in formalizing informal work. This is because workers at other large automobile firms in Korea, despite similar structural conditions, were not as successful in limiting the growth of precarious jobs. Thus, a full explanation requires us to look at a combination of structure and agency. I argue that strategies followed by regular and nonregular workers are critical for explaining the divergent outcomes of workforce dualization between HMC and HHI as well as GM Korea. More specifically, the rank-and-file militancy pursued by nonregular workers and solidarity from leftist regular worker activists at HMC were decisive in building collective resistance to precarity, paving the way for the formalization of informal workers.

Scholars have pointed to workers’ structural power—their positional power in the labor process or the labor market—as contributing to successful working-class mobilization. ⁴ While precarious workers are often viewed as lacking structural power in the labor market, this article shows that the strong workplace bargaining power possessed by workers at auto assembly factories due to their strategic location at the point of production was crucial for building precarious workers’ movements. Recent scholarship has also emphasized the role played by rank-and-file workers and labor activists on the shop floor and local communities in fostering class-based solidarity and building alliances and coalitions for precarious workers. ⁵ In line with the militant minority literature, this article also demonstrates how radical activists played a critical role in limiting the growth of precarious employment and wringing concessions from employers. Thus, my findings stress the importance of both structure and agency in explaining the emergence and success of precarious workers’ movements. ⁶

This article builds on and extends the literature on precarious work that views labor precarity as processes and examines the sources of power of marginalized informal workers. Labor-studies scholars have explained how informal/precarious workers successfully engaged in collective action, enhancing labor rights or improving welfare for workers. Rina Agarwala suggests that informal workers’ movements have successfully gained welfare benefits by leveraging their political power as voters. ⁷ Jennifer Chun contends that precarious workers build their symbolic power by waging dramatic struggles in public spaces to be recognized as workers and achieve their collective labor rights. ⁸ Janice Fine and Ruth Milkman stress the importance of coalitions between labor unions and community-based organizations in organizing the unorganized precarious workers. ⁹ However, the existing literature tends to focus less on the relations between regular/formal and nonregular/informal workers and thus fails to explain why informal workers succeed in transforming themselves into formal workers, especially in the context of labor force dualism where workers are divided into formal and informal workers.

To elucidate the conditions for success in formalizing informal workers, this article develops a conceptual framework on the cycles of labor informalization and formalization through a relational lens that examines the interactions among capitalists, the state, and formal and informal workers. ¹⁰ Capitalist employers promote the informalization of labor to keep labor costs low and weaken strong labor movements. By granting concessions to formal workers while excluding informal workers from collective bargaining rights, capitalists “draw boundaries” and undermine solidarity between formal and informal workers. ¹¹ The state also encourages the informalization by allowing employers to dismiss formal workers collectively and instead hire contract workers. ¹² While capital and the state foster the working-class fragmentation, workers can fight back against the boundary-drawing strategy, rebuilding solidarity and reversing the trend toward labor informalization (see Figure 3). Informal workers—aggrieved by exploitation, inequality, and discrimination at work—can organize collective protests and demand the formalization of informal employment. ¹³ Formal workers are not always complicit with capital and the state in endorsing informalization and instead adopt an inclusive approach to informal workers, building united fronts against precarization and dualization. ¹⁴ To the extent that formal and informal worker activists organize militant rank-and-file struggles and forge class-based solidarity, they can effectively push capital and the state to reduce precarious work and formalize informal workers.

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Figure 3.

The cycles of labor informalization and formalization.

This article is divided into seven main sections. In the first, I outline the rationale for the industry and company comparisons as well as the sources of data. The next section describes the convergent trend toward employment dualization at all three firms (HMC, HHI, and GM Korea) in the 1990s, as well as similarities in their history of precarious work and labor-capital relations. In the third section, I analyze the emergence of differences among the three firms in the first decade of the twenty-first century, especially with regard to the nature of the precarious workers’ movements and interactions between regular and nonregular workers at the three firms. The next three sections focus on the HMC story, providing an in-depth analysis of the rise, decline, and resurgence of rank-and-file militancy from the mid-2000s to the early 2010s and offering an explanation for how precarious worker activism at HMC achieved the formalization of informal workers. The final section discusses the implications of the findings, emphasizing the importance of both structural conditions and human agency in explaining the emergence of successful collective protests in formalizing informal/precarious work.

Data and Method

To account for the formalization of informal workers at HMC, this study compares labor relations and labor politics at HMC with those at HHI and GM Korea. The comparison between HMC (automobile) and HHI (shipbuilding) allows us to tease out the explanatory role played by differences in the organization of production and the labor process. Adding the comparison between HMC and GM Korea (that is, holding structural conditions constant) reveals that an explanation that relies solely on structural conditions is not sufficient. The contrast between HMC, on the one side, and HHI and GM Korea, on the other side, brings to light the crucial role of workers’ collective agency in fostering (or undermining) class-based solidarity between regular and nonregular workers, thus fully explaining the successful struggle to eliminate precarious work at HMC.

The empirical foundation of this article was built through intensive fieldwork that I carried out at HMC and HHI in Ulsan and GM Korea in Incheon in 2017–18. I conducted in-depth interviews with forty-one respondents, including union leaders, shop-floor activists, and rank-and-file workers at HMC, HHI, and GM Korea (see Appendix B for detailed information), most of whom had experience working with or organizing nonregular workers. These interviewees were recruited through snowball and purposive sampling with the help of local activists, using their connections with workers inside the factory. My interviews with dedicated activists allowed for a deeper examination of the union leaders and worker activists who nurtured labor movements for nonregular workers.

I also conducted archival research on the labor unions and workers’ movements at the three firms. Two labor history archives—Ulsan Labor Oral History and Sourcebooks on Twenty Year History of HMWU—were analyzed. Moreover, with the help of former and current union activists, I collected union newsletters, unpublished reports, electronic copies of wall posters, leaflets, and public statements, along with various internal union documents including minutes of meetings and workshops that were not available in the public domain. I also gathered and analyzed documents on the firms’ business strategies, financial statements, manpower management, production process, and labor control. Finally, I analyzed secondary sources including scholarly and journalistic articles and unpublished doctoral dissertations on the history of the three firms, including the history of their labor movements. By triangulating multiple sources, I was able to construct a narrative of precarious workers’ movements and their interactions with regular workers at all three firms.

Before explaining the divergent outcomes between HMC and HHI as well as between HMC and GM Korea, the next section explores the history of labor-capital relations and convergent trends in labor force dualism at the three lead firms in Korea's automobile and shipbuilding industries.

Historical Background

One possible explanation for the relative success at HMC might be found in its history as a major center of labor militancy during the Great Workers’ Struggle of 1987 and its aftermath, leading to a legacy of adversarial labor-management relations that made HMC workers more willing to fight against precarity. However, this explanation is not convincing, since the labor movements followed similar trajectories in all three firms. Before 1987, labor unions were either nonexistent (HMC and HHI) or controlled by the company (GM Korea, at the time Daewoo Motors). ¹⁵ Managers were infamous for their authoritarian labor control and were highly effective in suppressing wages. But workers in these chaebŏl-owned firms came to stand at the forefront of the nationwide struggles for better wages and labor rights during the “hot summer” of 1987—the historical peak of labor militancy in Korea.

Moreover, a significant decline in precarious employment occurred at all three firms in the late 1980s, with each moving to limit the number of precarious workers and the extent of workforce dualism. Employers hired thousands of contract workers before 1987. For example, HMC recruited contract workers in the bus and special vehicle assembly lines as well as in the maintenance, repairing, and cleaning departments, and HHI hired 25 percent of its manual workforce as nonregular workers in the mid-1980s. But workers in these firms were strong enough to eliminate precarious employment in the aftermath of the 1987 strike, leading to the decline of dualism in the late 1980s. ¹⁶

However, this trend was reversed in the three firms starting in the early 1990s. Workers in all three firms, facing employer offensives against independent unions, staged militant protests and proved strong enough to ward off any direct attacks on unionized formal workers in the early and mid-1990s. As managers were no longer able to arbitrarily dismiss regular workers and had to allow pay increases and benefits, they minimized the number of newly recruited regular workers and instead hired numerous nonregular workers ineligible for union membership. Regular workers developed exclusionary attitudes toward nonregular workers: they refused to accept contract workers as their union members. ¹⁷ The dualization of the workforce prevailed in all three firms from the mid-1990s to the early 2000s. In 1997, nonregular workers accounted for 16.9 percent and 19.5 percent of the total manual workers at HMC and HHI, respectively. Likewise, nearly 10 percent of the workers at Daewoo Motors were reported as nonregular workers in 1995. These percentages of contract workers, however, increased to 25 percent at HMC, 40 percent at HHI, and 29 percent at GM Korea in 2004, as shown in Figure 4.

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Figure 4.

Proportion of nonregular workers in Korea's lead firms in the automobile and shipbuilding industries in the 2000s. Notes: The available data on Kia Motors only include nonregular workers at the Hwasung factory, the largest plant in Kia Motors. GM-Daewoo Motors was renamed as GM Korea in 2011. Source: See Appendix A.

There were also many similarities in the labor market conditions among these chaebŏl-owned firms. The majority of regular workers were recruited in the 1980s owing to the growth in production and exports. Most were male workers who had graduated from a technical high school; women accounted for only 1–2 percent of the regular workers. ¹⁸ Many nonregular workers started to work at HMC, HHI, or GM Korea during the late 1990s and the early 2000s. The majority of them were young unmarried male workers who first entered the labor market after the crisis. ¹⁹ Women were estimated to make up nearly 8 percent of the nonregular workers at HHI and 10 percent at HMC. ²⁰ These female contract workers often worked at various off-line divisions, especially in the painting department where male workers were reluctant to work because of the exposure to hazardous work environments. While there are no striking differences in skills and education between regular and contract workers, nonregular workers received lower wages than regular workers in these firms. ²¹ As illustrated in Figure 2, in the early 2000s, contract workers at HMC earned less than two-thirds of the wages of formal/regular workers. Similarly, nonregular workers then received three-fourths of the regular workers’ wages at the shipyards.

While precarious work expanded dramatically and inequality persisted in all three firms until around 2003, a clear divergence in the extent of workforce dualism opened up between HMC and HHI as well as between HMC and GM Korea in the mid-2000s. As shown in Figures 1 and 4, while the number and proportion of nonregular workers continued to increase at HHI and GM Korea after 2005, the proportion began to decline at HMC in the mid-2000s. This moment of divergence coincided with the rank-and-file mobilization of precarious workers at HMC. Therefore, the remainder of this article will focus on the critical juncture between 2003 and 2005, that is, the period during which a major divergence arose in the extent of workforce dualization between HMC and the other two firms.

The Birth of Precarious Workers’ Movements

Precarious workers in all three firms sought to organize their colleagues into autonomous unions in the early and mid-2000s. Dozens of local labor activists got contract jobs in these large firms and built informal networks among workers and activists. In addition, a dozen or two of students-turned-workers who organized leftist student activism at colleges in the mid and late-1990s moved to Ulsan or Incheon, becoming informal workers in each firm in the early and mid-2000s. These activists shared the idea that organizing informal workers can improve prospects for a revitalized labor movement, given the historical legacies of militant unionism in all three firms. Despite similar efforts to organize informal workers and fight against exploitation and exclusion at work, the outcomes of their activism greatly differed, especially between HMC and HHI. HMC activists launched a successful drive to unionize nonregular workers while activists at HHI failed in their attempts to organize precarious workers. Why were nonregular worker activists at HMC more successful in getting rank-and-file support and organizing precarious workers than at HHI?

Structural explanations contend that the deskilled labor process at HMC provided more favorable conditions for activists in auto assembly factories to organize precarious workers than HHI activists. Work on the assembly lines at HMC requires a low level of skill. Since the late 1980s, HMC has installed hundreds of industrial robots and adopted flexible production technologies, replacing skilled regular workers. ²² As emphasized by a labor sociologist in Korea, “HMC invested in the automation of the production process rather than developing skills of workers” to decrease its reliance on manual workers and weaken the power of the independent strong union after the 1987 labor upsurge. ²³ As a result, newly recruited regular workers at HMC receive off-the-job training for two or three weeks, and nonregular workers are often put into production without any special training. ²⁴ Such deskilling in automobile production led to a situation where nonregular worker activists became accustomed to their jobs and tasks within a few months, helping their colleagues and exerting their influence without years of experience on the auto assembly lines. ²⁵ Despite their short work experience, they could gain the respect of their peers, serving as “organic leaders” among precarious workers on the shop floor. ²⁶

By contrast, the discontinuous large-batch production system in the shipbuilding industry made HHI more dependent on the skills and implicit knowledge of veteran workers. Regardless of their employment status, newly hired shipyard workers at HHI “learned their work from skilled workers” through informal on-the-job training and played a secondary role as assistants to veteran workers for their first few years of work at HHI. ²⁷ Thus, when students-turned-workers at HHI publicly launched organizing campaigns in the mid-2000s, most shipyard workers did not recognize them as organic leaders because those activists were inexperienced assistant workers who had spent fewer than five years in the shipyards.

Nonregular workers at HMC also have relatively strong workplace bargaining power compared to their counterparts at HHI. Even a small protest organized by a few informal workers at HMC can disrupt the entire production on the auto assembly lines. ²⁸ The rise of the just-in-time production system at HMC made employers more susceptible to wildcat strikes, given that they lose profits if they are unable to deliver cars on time. In contrast, HHI has been relatively less vulnerable to work stoppages than HMC. ²⁹ Since it takes two to three years to build a ship, HHI has the flexibility to modify the production schedule and thus can withstand small-scale and scattered protests organized by informal workers at the shipyards.

These structural differences in the organization of production and labor process are necessary but not sufficient conditions to explain the divergent levels of workforce dualism that emerged in the mid-2000s. Comparing HMC with GM Korea, another lead firm in the Korean automobile industry, casts doubt on a purely structural explanation. Despite similar conditions of continuous production on the assembly lines and a deskilled labor process, GM workers failed to limit the expansion of precarious employment in the mid-2000s. They were not able to organize collective protests and curb the growth of precarious employment. According to the Korean Metal Workers’ Union, the number of nonregular workers at GM Korea increased from 3,644 in 2004 to 4,970 in 2007, accounting for 36 percent of all manual workers (see also Figure 4). ³⁰

These findings lead us to examine the self-activities of precarious workers and their interactions with regular workers in explaining the divergence in workforce dualism between HMC and HHI as well as between HMC and GM Korea. There are at least three differences between HMC and the other firms that could explain why nonregular worker activists at HMC were more successful in getting rank-and-file support and organizing contract workers than their counterparts at HHI and GM Korea.

First, the leadership of experienced activists played a decisive role in building a precarious workers’ union at HMC. They engaged with union organizing and activism in other factories in the 1990s but lost their jobs in the aftermath of the Asian financial crisis. When they got a new contract job at HMC in the early 2000s, they could use their experience with and knowledge of labor activism to organize precarious workers. Ki-ho Ahn, the inaugural chairperson of the nonregular workers’ union at HMC, is probably the best example to illustrate this point. In the mid-1990s, he served as a union leader at Hyosung Metal, an aluminum chassis manufacturer, and built solidarity networks among local unions in the southern district of Ulsan. After he was dismissed because of corporate downsizing, and after union struggles against collective layoffs were defeated, he entered HMC as a contract worker simply to earn a living. ³¹ However, deeply shocked by the exploitation and discrimination of nonregular workers as well as the indifference of regular workers to the plight of nonregular workers at HMC, Ahn and other dedicated activists started bottom-up union organizing. He became an informal leader in the HMC's fifth plant and built solidarity networks across plants inside HMC's Ulsan factories. One of the local activists whom I interviewed remembered that “unlike students-turned-workers at HMC, Ahn got along with dozens of young workers through group activities including hiking, dinners, sports day, and drinking gatherings and persuaded them to join the new self-organization for nonregular workers.” ³²

This dedicated activist core was the founding leadership of the nonregular workers’ union at HMC. They launched union organizing drives after the “knife terror attack” incident where two managers at an in-house subcontracting firm at HMC's Asan factory assaulted a contract worker who requested a one-day paid vacation, cutting his Achilles tendon with a knife in March 2003. ³³ Their activism gained traction because precarious workers at HMC were enraged by physical violence and discriminatory practices by managers including no provision of safety equipment, no shuttle bus service, no freedom to take sick leave or paid vacation, and sexual harassment. ³⁴ These organic leaders organized dozens of students-turned-workers from different groups of student activists at colleges as well as hundreds of young contract workers into a new union called Hyundai Motor Nonregular Workers’ Union (HMNWU). Under the leadership of experienced activists, both groups of workers laid the groundwork for the new shop-floor activism at HMC.

This synergistic relationship among veteran leaders, students-turned-workers, and young rank-and-filers was largely absent at HHI or GM Korea. This was surprising given similar labor market conditions in all three firms in the early and mid-2000s. HMC, HHI, and GM Korea sought to recruit hundreds or thousands of nonregular workers each year because they experienced a boom in production and exports but minimized the new hiring of regular workers. Because of this labor shortage, students-turned-workers entered the factories without thorough background checks. Thousands of semiskilled workers from working-class neighborhoods—consisting mostly of young unmarried men—flooded into these factories and made up a significant segment of the manual workforce in all three firms. But unlike HMC, veteran labor activists were virtually nonexistent at HHI and GM Korea. For example, although there had been several experienced activists hired as nonregular workers at HHI during the late 1990s, these veterans “decided to work at petrochemical factories located in the southern district of Ulsan in the early 2000s to organize informal workers in plant construction and maintenance sectors.” ³⁵ At GM Korea, a dozen contract workers organized activist networks in the mid-2000s, but most of them consisted of students-turned-workers. ³⁶ Their lack of experience in work and activism prevented students-turned-workers from becoming influential organizers on the shop floor, especially at HHI. As a veteran shipyard worker recalled, “Students-turned-workers then worked less than a year at the shipyards and remained largely ignored by or isolated from the majority of nonregular workers at HHI.” ³⁷

Second, nonregular workers at HMC were closely connected to and supported by the working-class community and local labor movement organizations. Most of them lived in the northern district of Ulsan, the traditional working-class neighborhoods for metal workers near HMC factories in the 2000s. When the increasing number of regular workers at HMC relocated to new middle-class residential areas, young nonregular workers at HMC still lived in these relatively poor communities. Many nonregular workers, mostly male unmarried workers, ate and drank together after their shift ended and joined various socialization activities in these neighborhoods, having chances to share their grievances about harsh working conditions and discrimination at work. Local labor organizers who went to the northern district of Ulsan in the mid- and late 1990s took root in these neighborhoods and, in the early 2000s, built new labor NGOs such as the Ulsan Workers’ Newspaper (which put out a newspaper with the same name) and the Alliance for Eliminating Industrial Accidents in Ulsan. They engaged with union organizing led by precarious workers at HMC by providing spaces for union offices outside the factories, attending meetings, workshops, and rallies, and helping to educate and train newly recruited union members.

Nonregular workers at HHI and GM Korea, however, did not receive solidarity and support from activists in the local communities. While several dismissed regular workers at HHI sought to build a local labor movement organization in the eastern district of Ulsan near the shipyards, their self-organization came under employer attack and thus failed to nurture new local organizers. The migration of precarious worker activists from shipyards to petrochemical plants in the early 2000s also contributed to weakening solidarity networks between shipyard workers and local labor activists in the eastern district of Ulsan. Similarly, unlike formal workers at GM Korea who had strong ties with political parties, regional labor unions, and civic organizations in Incheon, informal workers at GM Korea were separated from the civil society organizations except for a few leftist groups.

Finally, solidarity-oriented regular workers at HMC supported shop-floor protests led by nonregular workers. These militant regular workers opposed the reformist union leaders who accepted the collective dismissal of 277 workers and the temporary layoff of 1,261 in August 1998 (see Appendix C for a chronology of labor movements at HMC). In the early 2000s, they organized an informal “shop-floor organization” (hyŏnjangjojik) called the Struggle Committee for Shop-Floor Power (SCSP; hyŏnjangt’u). ³⁸ They joined rank-and-file protests initiated by nonregular workers inside the HMC factories, helping them disrupt assembly production and wring concessions in wages and working conditions from their legal employers—owners of in-house subcontracted firms. ³⁹ For instance, when thirty female workers who mounted bumpers on cars staged a wildcat strike at Hyundai Seshin, a second-tier contract firm in HMC's third plant in Ulsan, on July 3, 2003, they won substantial concessions because dozens of regular workers protected their unauthorized strike. ⁴⁰

By contrast, such militants were either nonexistent or weak at HHI and GM Korea. Regular worker activists at HHI impeded the union organizing campaigns led by nonregular workers. In the early 2000s they elected pro-employer activists as union delegates and union leaders (see Appendix D for a chronology of labor movements at HHI). ⁴¹ And in the mid-2000s, this new leadership team brought about extremely unfavorable conditions for organizing nonregular workers at HHI. Conservative union leaders and delegates at HHI—in alliance with managers and in-house police—suppressed the union organizing drives that followed the self-immolation of Il-su Park in February 2004. Owing to the lack of influence from reformist or leftist activists as well as the repression from conservative unionists, capitalists wielded unchecked power, dismissing nonregular workers who joined the protest in the summer of 2004. ⁴² In the case of GM Korea, the vast majority of regular workers and their union delegates remained uninterested in organizing nonregular workers because their labor union leaders were still fighting for the reinstatement of dismissed regular workers in the mid-2000s. It was not until 2006 that a few regular worker activists started an informal consultation between regular and nonregular workers at GM Korea. ⁴³

Class Struggle and Intraclass Struggle

While informal workers at HMC were more successful in their union organizing than their counterparts at HHI or GM Korea, they could not avoid conflicts with reformist activists who constituted the majority of union representatives of HMWU, the formal workers’ union at HMC. These reformists aimed to bring nonregular workers under their control and to negotiate with employers on their behalf, limiting the autonomy of nonregular workers. Thus, conflicts emerged between reformist regular workers and militant nonregular workers. These precarious workers engaged in two struggles—a class struggle against their legal and substantive employers and an intraclass struggle against regular workers who attempted to control the self-organization of nonregular workers.

Intraworker conflicts began to arise in June 2003 when HMC announced the layoff of 340 nonregular workers at its fifth plant owing to the phase-out of a midsize sport utility vehicle called Hyundai Galloper. ⁴⁴ While HMC claimed that the layoff was needed to reorganize assembly lines before putting a new model into production, employers used this opportunity to dismiss nonregular worker activists dedicated to union organizing campaigns. Nonregular workers in the fifth plant set up a protest encampment and planned to organize a wildcat strike. ⁴⁵ They also decided to organize an independent union temporarily before HMWU accepted them as union members. ⁴⁶ Regular workers, however, opposed this strategy at a workshop of the Special Committee for Organizing Nonunionized Workers at HMC in July 2003. ⁴⁷ They insisted that nonregular workers should reconsider their plan for organizing an independent union and even prevented informal workers from joining the autonomous union. ⁴⁸ One interviewed activist remembered that “we [nonregular workers] started a union organizing campaign right after the inauguration ceremony and about five hundred workers joined the union during the night shift on July 8, 2003. However, when we resumed the same campaign on the next day, most contract workers refused to sign up as union members because HMWU came out publicly in opposition to the new union for nonregular workers.” ⁴⁹ While union representatives adopted a resolution to change the bylaws to open union membership to informal workers in September 2003, they did not develop and implement policies to include informal workers as union members. ⁵⁰

Notwithstanding the lack of support from regular workers and their union leaders, nonregular workers continued to organize shop-floor struggles at HMC. But these protests were small and scattered, mostly targeting their legal employers—in-house subcontracting firms. ⁵¹ In an attempt to go on factory-wide strikes, informal worker activists changed the main target to their substantive employer—HMC—and demanded the formalization of informal workers around 2004. Nonregular workers at HMC performed the same or similar jobs and tasks as regular workers did on the assembly lines but were hired by in-house subcontracting firms that did not own any means of production. ⁵² HMC managers directly controlled the work processes and determined the wages and working conditions of nonregular workers. Because the Worker Dispatch Law in Korea prohibited the use of dispatched workers for manufacturing production, nonregular workers at HMC argued that they were “illegally dispatched” workers who labored under the direct supervision and control of HMC managers. ⁵³ They launched a new protest campaign called “struggles against illegal dispatched work” (pulbŏp p’agyŏn t’ujaeng) to argue for the responsibility of HMC as their employer. These “classification struggles” aimed to unite all nonregular workers across different workplaces at HMC by redefining their employer and claiming their collective labor rights. ⁵⁴

Most of the union leaders and representatives at HMWU were reluctant to support this new strategy. They denied the illegal nature of precarious employment at HMC and opposed filing a petition to request a government investigation in May 2004. ⁵⁵ It was several militant regular workers who supported the struggle to demand the formalization of informal workers. These militants made efforts to defend informal workers’ rights to unionize and strike, respecting informal workers as comrades. They also thought that this new shop-floor activism led by precarious workers leveraged the bargaining power of auto assembly workers vis-à-vis HMC. Since some of these activists were elected union delegates of the HMWU and attended the man-hours negotiations, “they were able to collect critical information on the use of informal workers at HMC.” ⁵⁶ For example, they proved that nonregular workers on the left-hand side were in charge of the same jobs and tasks as regular workers on the right-hand side and that many nonregular workers on the night shift worked at the same jobs as regular workers did on the day shift. ⁵⁷ During the government's on-site investigation in August 2004, these militant activists also testified to government inspectors that line supervisors—hired as permanent employees of HMC—were held responsible for monitoring the tasks assigned to nonregular workers on the assembly lines. ⁵⁸ Thanks to the detailed knowledge that these activists provided on the work organization and labor process at HMC, the Department of Labor declared that nonregular workers hired in twelve subcontracting firms at HMC were not legally dispatched. ⁵⁹ Three months later, the government served official notice that nonregular workers hired by all in-house subcontracting firms were illegally dispatched at HMC. ⁶⁰

In contrast, HHI was able to evade its responsibility as an employer. After the self-immolation of Il-su Park at HHI, the Department of Labor and the Fair Trade Commission announced on March 8, 2004, that they would investigate in-house subcontracting firms in Korea's major shipyards. ⁶¹ But since the investigation was scheduled for April 19–20, HHI had enough time to destroy the evidence on its intervention in hiring and firing nonregular workers and its practice of putting both regular and nonregular workers into the same workgroup. To cover up these illegal practices, the owners of HHI's in-house subcontracting firms pushed nonregular workers not to talk about their coworking with regular workers and to answer the survey questionnaire inside the office, where their managers stayed and monitored them. ⁶² The government concluded that HHI did not violate the Worker Dispatch Law, and thus nonregular workers at HHI—contrary to their counterparts at HMC—had little legal leverage to organize collective protests in the mid-2000s.

Similarily, nonregular workers at GM Korea's Bupyeong factories failed to launch a campaign demanding the formalization of informal workers in the mid-2000s. Students-turned-workers and leftist activists at GM Korea failed to gain support from rank-and-file informal workers. This failure was partly because both management and the labor union pursued a policy of “recruitment by selection” (palt’ak ch’aeyong) among nonregular workers at GM Korea. ⁶³ To get an opportunity to become formal workers, most informal workers at GM Korea remained silent rather than stage collective protests. ⁶⁴ It was not until fall 2007 that dozens of nonregular workers organized the autonomous union at GM Korea to defend their jobs when faced with planned layoffs. ⁶⁵ GM Korea responded by dismissing the students-turned-workers who led the union. The dismissed workers built a protest encampment outside the GM factories and continued to struggle for their reinstatement and for the job security of precarious workers in the late 2000s. ⁶⁶

The 2005 Wildcat Strike

Fueled by the government's favorable decision, nonregular workers at HMC organized mass-based strikes. They first planned not to work overtime starting on January 20, 2005. ⁶⁷ In response, HMC compelled its in-house subcontracting firms to secretly hire strikebreakers in advance. ⁶⁸ But right after managers put fourteen replacement workers on the job at the fifth plant, about sixty painting workers initiated a sit-down protest during the night shift on January 15, 2005. This spontaneous protest escalated into a major wildcat strike on January 18, when Yeong-Mi Jung, a female worker who led the struggle, was dismissed because of her activism. ⁶⁹ More than one hundred nonregular workers occupied the locker room near the assembly lines at the fifth plant while another four hundred in other plants skipped overtime work. ⁷⁰

HMC management repressed nonregular workers in protest. HMC sued strikers for illegal occupation and demanded their eviction. ⁷¹ Managers and in-house security guards even kidnapped the union leader, Ki-Ho Ahn, and handed him over to the police. ⁷² HMC stopped providing water and electricity to the locker room. ⁷³ HMC managers were most afraid that regular workers would join the work stoppage and block the use of replacement workers, thereby bringing automobile production to a halt. Managers sought to persuade regular workers not to support nonregular workers’ protests, arguing that “the formalization of informal workers would lead to a decrease in profitability, and thus, an erosion of job security for regular workers.” ⁷⁴ They also dismissed regular workers who stopped the assembly line in solidarity with nonregular workers on strike. ⁷⁵

Reformist regular workers expressed their concerns over nonregular workers’ protests. They stressed the principles of “codetermination” and “coresponsibility” to prevent nonregular workers from staging protests without their consent. ⁷⁶ For example, Yoo-Ki Park, a reformist activist who later became the union leader of HMWU twice, objected to militant protests led by nonregular workers on the shop floor. ⁷⁷ These reformists remained silent when company police attacked nonregular workers in protest and regular workers who supported the protest.

The wildcat strike provoked intraclass conflicts between regular and nonregular workers. Admittedly, reformists played an important role in the unionization of informal workers at HMC during the 2005 strike, reaching its peak of two thousand members as of July 7, 2005. However, the growth of union membership among nonregular workers hardly contributed to the success of rank-and-file protests. Reformist union leaders and activists attempted to discourage these newly unionized informal workers from joining the ongoing protests led by militants. ⁷⁸ Rather, the union growth aggravated the chasm between militants and reformists among nonregular workers, making them unable to join forces to take collective action. When the nonregular workers’ union called for a two-hour walkout on August 25, about three hundred out of two thousand union members engaged in the strike on both shifts combined. ⁷⁹ Since managers and company police outnumbered nonregular workers in protest, most were expelled from the shop floor, thus failing to disrupt production on the assembly lines. As a result, nearly one hundred informal workers were fired for their involvement in the wildcat strike.

Frustrated by the defeat of the August protest, a dismissed nonregular worker named Ki-Hyuk Ryu immolated himself on September 4, 2005. However, HMWU refused to recognize him as a labor movement martyr. While a few leftist regular workers criticized their union leaders for the indifference to Ryu's self-immolation, the majority of union delegates and shop-floor activists were reluctant to commemorate the labor martyr to avoid any conflicts with HMC management. ⁸⁰ Those precarious workers who had pursued a rank-and-file strategy also resigned from their union leadership posts at HMNWU in September 2005 due in part to their imprisonment and to their failure to gain concessions from HMC.

The Truce, Factory Occupation, and Negotiation

After the 2005 strike, HMC management and nonregular workers reached an informal truce. Nonregular workers retreated from the rank-and-file strategy, changing the main target from HMC to its in-house subcontracting firms. The new leadership team focused on negotiations with their legal employers to achieve collective bargaining rights rather than fighting against their substantive employer. ⁸¹ In return, HMC agreed on pay increases and allowed subordinate bargaining for nonregular workers. There have been gradual wage increases among nonregular workers at HMC since the mid-2000s (see Figure 2). Turnover rates plummeted thanks to improvements in wages and working conditions, and thus the number of new job openings declined at HMC. ⁸² As emphasized by one interviewed manager at an in-house subcontracting firm, “Regular workers and even managers at HMC often contacted the owners of in-house subcontracting firms to get contract jobs for their children and relatives in the late 2000s.” ⁸³

Regular workers at HMC welcomed this truce. They wanted to control the nonregular workers’ union. ⁸⁴ They believed that nonregular workers could maximize their benefits when regular workers negotiated on behalf of nonregular workers through “subordinated bargaining.” ⁸⁵ HMC managers also introduced policies designed to preempt further labor unrest. These managers centralized corporate control over the use of nonregular workers after the 2005 strike because militant shop stewards gained concessions for nonregular workers using decentralized plant-level negotiations with managers. ⁸⁶

But neither HMC management nor regular workers prevented nonregular workers from organizing collective protests. A new wave of strikes at HMC occurred in the latter half of 2010. Two former dismissed activists filed legal claims against their unfair dismissals, and the Supreme Court adjudicated in July 2010 that one of these workers, Byung-Seung Choi, should be regarded as a regular worker directly hired by HMC. ⁸⁷ Since he worked for more than two years in the same in-house subcontracting firm, the court recognized his legal right to become a permanent employee of HMC. This unexpected court decision opened up a new opportunity to organize nonregular workers. ⁸⁸ During a workshop, Byung-Seung Choi recalled that “union activists copied and disseminated the court's decision on the shop floor to let workers know this decision in the summer of 2010 and, as a result, more than 1,200 workers joined the nonregular workers’ union within two months.” ⁸⁹

A series of favorable legal decisions at HHI, however, did not precipitate the mobilization of nonregular workers or guarantee the success of precarious workers’ movements. The court ruled that even though HHI management was not the legal employer of nonregular workers, they did govern workplace relations at their in-house subcontracting firms. ⁹⁰ But despite favorable rulings, nonregular workers’ movements failed to gain traction at HHI due to the absence of shop-floor activists. Since the existing nonregular workers’ union hardly received any support from HHI regular workers and had almost no influence inside the yards, their protests were limited to leafleting in front of factory gates. ⁹¹

Moreover, the case of GM Korea shows that, while the lawsuit and the court's decision give an impetus for the union's growth, informal workers also need to build their influence on the shop floor to gain legal leverage. Motivated by the Supreme Court's decision on the HMC case in 2010, the Korean Metal Workers’ Union in the fall of 2010 proposed that GM's informal workers file a lawsuit against GM management. But since most informal worker activists were dismissed and lost their influence at GM Korea, they fought for their reinstatement in the early 2010s. ⁹² After a dozen workers finally got back to work in 2013, they launched the lawsuit, arguing that GM illegally hired nonregular workers. Thanks to these efforts, the informal workers’ union increased its members to nearly sixty and obtained the first court decision in favor of informal workers at GM Korea in 2016. ⁹³

It was the rank-and-file strategy adopted by nonregular workers at HMC that pushed employers to enter multiparty negotiations regarding the formalization of informal/nonregular employment. Nonregular workers turned the moral tables on HMC and its in-house subcontracting firms with the government ruling that employers violated the Worker Dispatch Law. This ruling galvanized precarious workers’ activism. In fighting against unfair dismissals of contract workers at the auto seat production lines, nearly one thousand nonregular workers walked out in the HMC's first and second plants and occupied the connected trim shop (CTS) in the first plant on November 15, 2010. ⁹⁴ Because the CTS was the beginning of the assembly lines where workers unmounted doors to install parts, they occupied a strategic position in the labor process and were able to paralyze production in HMC's first plant for twenty-five days. ⁹⁵ HMC was forced to initiate negotiations with nonregular workers for the first time during the 2010 strike.

This factory occupation would have been nearly impossible without solidarity-oriented regular workers. Unlike reformist union leaders and executives at HMWU who urged nonregular workers to stop sit-in protests, there were several militant regular workers in the HMC's first plant dedicated to supporting precarious workers’ movements. As shop stewards, these militant activists persuaded their coworkers to prevent managers from crushing the strike. ⁹⁶ They also stopped the assembly lines on behalf of nonregular workers, running the risk of criminal prosecution.

After the 2010 strike, HMC started multiparty negotiations with both regular and nonregular workers’ unions. HMC announced that they planned to hire three thousand nonregular workers as regular workers during the period of collective bargaining with regular workers’ unions in 2012. ⁹⁷ While HMC reached a final agreement with the nonregular workers’ union in Ulsan on March 21, 2016, employers had already begun to convert informal workers to formal workers through internal recruitment starting in the fall of 2012. Since the informal workers’ union leaders demanded the formalization of all informal workers at HMC, they refused to apply for this special recruitment. But against the union decision, many nonregular workers—including those who joined the 2010 strike and lost their jobs because of their illegal strikes and occupation—applied to internal recruiting and became permanent workers in the mid-2010s. ⁹⁸ It is paradoxical that the majority of nonregular workers who led the 2010 HMC strike no longer serve as shop-floor activists and thus fail to maintain the militant identity or foster internal solidarity among themselves. ⁹⁹

While informal workers at HMC became less militant once they succeeded in becoming formalized in the mid-2010s, HHI has recently emerged as a new key site of labor militancy led by informal workers. With the exponential growth of precarious employment in the past two decades, HHI externalized the risks of industrial accidents and occupational-related diseases to nonregular workers. In response, precarious workers at HHI launched a protest campaign against industrial accidents beginning in the early 2010s. A dozen nonregular workers, deeply aggrieved by this managerial practice, organized their colleagues and revitalized the labor union movement in the early and mid-2010s. Faced with low wages and job insecurity arising from the crisis of profitability in Korea's shipbuilding industry, they stood at the forefront of nonregular workers’ struggles in the late 2010s. ¹⁰⁰ Leftist nonregular workers at HHI—similar to the militant minorities at HMC in the mid-2000s—fought for their right to unionize without retaliation and work in safer conditions, managing to ensure union survival despite the collective layoffs and anti-union strategies. ¹⁰¹ Reformist regular workers at HHI accepted nonregular workers as their union members in fall 2017. While the outcomes of precarious workers’ struggles are still open-ended, HHI precarious workers not only promote shop-floor mobilization but also demand the formalization of informal employment to strengthen informal workers’ organizations and to compel their substantive employer to allow collective bargaining rights. However, because their structural position due to the nature of the labor process is still weaker than that enjoyed by informal workers at HMC, they face an uphill struggle, and while they have engaged in militant struggles, they have not so far succeeded in winning their key demands.

Conclusion

To return to the original question posed at the beginning of this article: Why were automobile workers at HMC successful in limiting the growth of nonregular workers and converting precarious work to regular employment while shipyard workers at HHI or auto assembly workers at GM Korea failed to do so? Table 1 identifies the structural conditions and contingent strategic actions of workers that help to explain the emergence of successful protests, leading to the formalization of informal employment at HMC. The differences in the labor and production process between automobile and shipbuilding industries in part explain the success of union organizing drives among precarious workers at HMC and the failure at HHI. Nonregular worker activists at HMC and HHI made parallel efforts to organize their fellow precarious workers in the early 2000s. A high level of deskilling on the auto assembly lines enabled those activists to get accustomed to factory work without long years of experience and allowed them to become organic leaders on the shop floor. The fast-moving assembly lines and continuous production system also conferred relatively strong workplace bargaining power on auto assembly workers. ¹⁰² In contrast, the reliance on skilled workers at the shipyard made it very difficult for those activists to gain influence at work and organize their colleagues into labor unions. Also, the discontinuous large-batch production system and long-term production schedule for shipbuilding gave more leeway for HHI to withstand strikes and other disruptive protests made by nonregular workers at the shipyards.

OPEN IN VIEWER

Table 1.

Structure and Agency in Precarious Workers’ Movements at HMC and HHI.

	HMC (Automobile)	HHI (Shipbuilding)
Structure
Labor process	Continuous production; deskilling	Discontinuous production; reliance on skilled workers
Workplace bargaining power	Strong	Weak
Agency
Nonregular workers	Synergistic relations between experienced labor activists and students-turned-workers in the union leadership; strong ties between activists and rank-and-file workers	Lack of veteran labor activists: inexperienced students-turned- workers only in the union leadership; weak ties between activists and rank-and-file workers
Regular workers	Reformist union leaders (subordinated bargaining); strong solidarity and support from leftist activists	Conservative union leaders (exclusion); lack of solidarity and support from leftist activists

These differences in the labor process, however, are necessary but insufficient conditions to explain the different levels of labor force dualism and divergent outcomes of union organizing campaigns. As seen in the case of informal workers at GM Korea, there are precarious workers in other major auto assembly firms who failed to limit the expansion of precarious employment despite similar conditions of production and labor processes.

My findings suggest that it would be almost impossible to translate favorable structural conditions into effective protests without the involvement of radical activists on the shop floor. Precarious workers at HMC—with the help of local labor activists—were better at building working-class solidarity, developing coherent protest strategies together with local labor activists, and organizing mass-based collective protests than their counterparts at GM Korea. These dedicated organizers not only supported spontaneous struggles against exploitation and discrimination but also proposed a new protest campaign demanding the formalization of informal/precarious employment. By organizing unauthorized strikes, they compelled employers to authorize the nonregular workers’ union as a legitimate bargaining unit. This was in contrast to nonregular worker activists at GM Korea. They were dismissed for a long time, fought for their survival, and failed in their attempts to build a strong union for precarious workers. These findings provide support to the argument in the general literature on labor movements, suggesting that the strategic capacity and self-activity of informal workers play a key role in the successful mobilization of workers in resisting precarity. ¹⁰³

This article also focuses on the role played by regular workers in promoting or hampering working-class solidarity. A few leftist regular workers at HMC fought alongside nonregular workers and contributed to obtaining a court ruling favorable to nonregular workers and actualizing the structural bargaining power of automobile workers by disrupting the auto assembly production during the strikes. ¹⁰⁴ However, conservative union leaders and activists at HHI played a key role in the withering of participatory workplace democracy, repressing the autonomous activism led by nonregular workers and excluding them from collective bargaining rights. Thus, these findings lend support to the literature on union democracy and working-class ideology, demonstrating the importance of radical activists and rank-and-file participation in organizing effective worker protests and forging broad-based worker solidarity. ¹⁰⁵

My evidence highlights the interplay between structural determination and human agency in accounting for the emergence of successful class-conscious labor movements. ¹⁰⁶ While the labor process and positional power of auto assembly workers were structural conditions that were more advantageous to union organizing, these factors were not sufficient to organize nonregular workers’ unions and build their power from below. It was militant organizers from both regular and nonregular workers who developed strategies and tactics that actualized the latent power of automobile workers.

Finally, my argument on the relevance of union ideology has important implications for the growing literature on the outcomes of precarious workers’ movements. My findings are consistent with recent studies emphasizing solidarity and support from regular workers and their unions as a necessary condition for union success in neoliberal Korea. ¹⁰⁷ However, this study corroborates that the political practices or ideology of union activists—whether radicals, reformists, or conservatives—played an independent role in facilitating or impeding class-based solidarity between divided workers and thus in the success or failure of precarious workers’ movements. ¹⁰⁸

Supplemental Material

sj-docx-1-pas-10.1177_00323292221078652 – Supplemental material for The Formalization of Informal Workers at Hyundai Motor Company

Supplemental material, sj-docx-1-pas-10.1177_00323292221078652 for The Formalization of Informal Workers at Hyundai Motor Company by Minhyoung Kang in Politics & Society