Korea falls prey to its own supply chain woes

TOKYO -- Dual emergencies have hammered the auto-making juggernauts of Japan and Korea this spring.

Japan's industry collapsed after the March 11 earthquake and tsunami wiped out the country's supply chain. Korea's auto industry was crippled after workers this month held a sit-in strike at piston ring maker Yoosung Enterprise, shutting the operation for a week.

But while Japan was cursed by a natural disaster no one could control or predict, Korea's automakers faced a man-made problem with a much easier solution.

After days of stymied production at Hyundai and Kia -- the backbone of Korea's auto industry -- the government sent in 2,500 riot police to oust the 700 workers striking for a new shift schedule and pay system, according to the country's Chosun Ilbo newspaper.

I'm sure Japan looks on wistfully thinking: "If only restarting our plants could be so easy …"

But the Korean incident underscores the country's trouble points.

First, carmakers and suppliers there have a much more contentious relationship with their workers than their Japanese rivals. Auto strikes in Japan? Since when?

Secondly, the Hyundai-Kia group wields such purchasing power and influence in the country that the parts making sector is consolidated into a clutch of critical companies.

Roughly a dozen companies such as Yoosung monopolize more than 70 percent of the market for a particular auto part, Chosun Ilbo said.

Small wonder Kang Chul-koo, head of the Korea Automobile Manufacturers Association, issued this dire warning to his members: "To prevent the entire auto industry from coming to a halt just because supply of one key part stops, carmakers need to diversify their parts suppliers."

When it comes to supply chain, Korea has learned some lessons.

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