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Hyundai rehires R&D president let go over quality issues

Last November, Hyundai announced the resignations of research and development president Kwon Moon-sik and two other R&D executives. At that time, it was said that the executives wished to "take responsibility for a series of quality issues" at the Korean automaker. Kwon Moon-sik had only been in the position for a year, but some of the quality issues thought to have caused the resignations included recalls of the Genesis and other sedans around the world, along with the company's much-publicized fuel economy overstatement controversy - both of which dealt with matters that transpired before Moon-sik took his position. In its statement at the time, Hyundai said, "The latest personnel change shows our firm commitment to quality management and reaffirms our will to continuously improve R&D competitiveness."
Three months later, Reuters is reporting that Moon-sik is back with the company, a statement announcing the rehire saying, "Given his expertise, experience and leadership skills, we reinstated president Kwon to enhance quality and R&D capability from scratch." Company chairman Chung Mong-koo is said to have a reputation for firing then rehiring workers, and it's possible this rehire is especially timely because Hyundai will bring its new Sonata to market this year and likely wants its experienced R&D captain at the wheel.
The man who had taken Moon-sik's position has returned to his previous post as head of powertrain development. However, in another surprise resignation, the head of Hyundai's design center, Oh Sug-geun, has left the company for "personal reasons." He has been replaced by Lee Byung-seob, who moves up from his position as head of exterior design.

South Korea firms up fuel economy regs following Hyundai/Kia debacle

According to a report from Reuters, South Korea's government has drafted strict new rules for automakers to follow when calculating fuel economy. The legislation comes after a major snafu by Hyundai and Kia that resulted in the automakers lowering the estimated fuel mileage of many popular models - some by several miles per gallon, including the Soul subcompact above - and compensating owners in the US and Canada for the reduction.
The new fuel economy rules were announced by the Ministry of Trade, Industry and Energy in South Korea and will see average mileage ratings drop by roughly three to five percent, according to the report. In addition, manufacturers found guilty of overstating mileage figures will be liable for fines of up to $900,000.
These sweeping new regulations will go into effect in the second half of 2013 and, while they won't have any effect on EPA estimates for Hyundai and Kia vehicles in the United States, they are expected to result in new ratings for the two automakers in their home market of South Korea, where they enjoy a whopping 70-percent market share.

Foreign automakers pay from $38 to $65 per hour to non-union workers

As leaders for the United Auto Workers gather in Detroit for their Special Convention on Collective Bargaining to work out the negotiating stance for this year's new labor agreements with the Detroit 3 automakers, what they most want to do is figure out how to eliminate the two-tier wage scale. However, the lower Tier 2 wage has allowed the domestic automakers to reduce their labor costs, hire more workers, and compete better with their import competition. As it stands, per-hour labor rates including benefits are $58 at General Motors, $57 at Ford, and $48 at Fiat-Chrysler – a reflection of FCA's much greater number of Tier 2 workers. The Center for Automotive Research released a study of labor rates (including benefits) that put numbers to what the imports pay: Mercedes-Benz pays the most, at an average of $65 per hour, Volkswagen pays the least, at $38 per hour, and BMW is just a hair above that at $39 per hour. Among the Detroit competitors, Honda workers earn an average of $49 per hour, at Toyota it's $48 per hour, Nissan is $42 per hour, and Hyundai-Kia pays $41 per hour. The lower import wages are aided by their greater use of temporary workers compared to the domestics. Automotive News says the ten-dollar gap between those foreign camakers and the domestics turns out to about an extra $250 per car in labor, which adds up quickly when you're pumping out many millions of cars. That $250-per-car number is one that, come negotiating time, the Detroit 3 will want to reduce, as the UAW is trying to raise both Tier 1 and Tier 2 wages. Another wrinkle is that the domestic carmakers are considering the wide adoption of a third wage level lower than Tier 2. Some workers who do minor tasks like assembling parts trays kits and battery packs already make less than Tier 2, but the UAW will be quite wary about cementing yet another wage scale at the bottom of the system while it's trying to fight a bigger battle at the top. News Source: Automotive News - sub. req., BloombergImage Credit: AP Photo/Erik Schelzig Earnings/Financials UAW/Unions BMW Chevrolet Fiat Ford GM Honda Hyundai Kia Mercedes-Benz Nissan Toyota Volkswagen labor wages collective bargaining labor costs