By on May 2, 2016

North Korea (Image: CC BY-SA 3.0, Wikimedia)

Like two brothers who really, really, really can’t get along (I can’t stress enough how much they don’t get along) no matter how hard they supposedly try, the Koreas have a hot/cold relationship, to put it mildly.

One moment, the brothers are manufacturing trinkets together in Kaesong Industrial Region, a special administrative region in the DPRK. The next, the North is threatening to bomb everyone and the South shuts off the water and electricity service (literally) to its brother’s apartment.

But what if the Koreas unified; became whole again? Mike Rutherford of AutoExpress thinks it would be a car-building paradise, with Hyundai, Kia, Samsung, and SsangYong best poised to take advantage of low-cost Northern labor and cheap, cheap land.

In a short editorial over the weekend, Rutherford set the stage for his thesis by stating the South is just too darn successful and it’s outgrowing its own abode:

Hyundai Group reckons it’s built 100 million vehicles so far. But the firm has grown so huge down south that it’s running out of factory land, road space, natural resources, power stations and production line employees. That’s why it and other vehicle producers – including Samsung – need the greenfield sites and countless millions of hungry, willing and able workers up north.

You hear that? Hyundai needs North Korea to grow. Instead of expanding to, um, a country with a more friendly political climate, Rutherford believes (or at least pretends to believe) that a unified Korea would provide untold benefits to the car-building industry in the region.

Except for one little issue: the Koreas, while ethnically the same, have been separate since 1945. One is an industrial powerhouse. The other is a state on welfare. (Not a welfare state. That’s a very different thing.) On a regular basis, the Koreas trade barbs and blows. More money is spent fighting each other (the two are still technically at war) than any economic benefit generated by Kaesong Industrial Region, the area in DPRK that’s administered by the North and financially supported by the South.

And this is where Rutherford’s argument completely falls apart: The very cooperation that he provides as an example of evidence of future Korea reunification has been shut down multiple times for various reasons, and it currently sits dormant thanks to Kim Jong-un’s latest lunacy and the South’s reactions to it. Kaesong is a make-work project that allows the South to put boots on the ground in the North, and it’s certainly not indicative of a grand coming together.

While it’s fun to play “what if” and posit an idea now and then, the reality of a unified Korea is further off than it has been in decades.

Don’t count on North Korean Kia Rios in our lifetime, folks.

[Image: J.A. de Roo/Wikimedia (CC BY-SA 3.0)]

Get the latest TTAC e-Newsletter!

Recommended

38 Comments on “Rutherford: Unified Korea Would Be Car-Building Paradise...”


  • avatar
    DeadWeight

    South Korean labor unions would go bat$hit crazy and fear the mere idea of a Korean Unification, because it would be like NAFTA on steroids, holding out the very real promise of seeing large Korean conglomerates such as Hyundai etc, which are chaebol (the equivalent of Japanese kereitsu), be able to pay 1/30 the the wages to formerly malnourished North Koreans as they presently do to South Koreans (who have a strong, militant union presence).

    • 0 avatar
      Kenmore

      And why would China, the only regional player with any clout over the Norks to help this happen, wish to set up some other nation’s “car-building paradise” or to aid the infusion of cheap labor and fresh greenfield to other South Korean industries already vastly superior to their own?

      • 0 avatar
        DeadWeight

        China would not – having its own, massive economic problems, particularly in manufacturing – , which is one small part of the reason why it props up the North Korean psychopath regime with what’s the equivalent of state welfare.

    • 0 avatar
      marjanmm

      The fall of communism did a similar thing to western middle class and they never suspected it when they celebrated the victory in the cold war. Perhaps South Koreans can be persuaded with enough patriotic propaganda?

  • avatar
    JimZ

    I don’t see it ever happening while anyone from the Kim family is in charge. Why would they want to let go of what they have? You have a population which showers adoration on you (whether they actually want to or not) and all you need to do to stay in power is make noises and rattle sabers every once in a while until the world pays you off to shut you up once again.

  • avatar

    Yes, and while we’re at it, if all those Middle Eastern scrappers would just agree to hold hands and sing, there could be a killer opportunity for Jeep out there. Or something.

    What the author posits is more likely, of course, but the only way to guarantee stable production–key in the auto manufacturing world–is to ensure both parties never step on each other’s toes. That basically means the fall of the Kim regime or the conquest of the South by North Korea, and there’s too much vested interest by TPTB in the region to allow either scenario to happen. These countries remaining divided is good for business.

  • avatar
    Sjalabais

    If there’s any historic precedent, there’s the German reunification. East Germany was not as decrepit as North-Korea, but it had not one industry that was competitive as it was. Unemployment in the east shot up to 30-40% and stayed there until many a competent Easterner had moved west, thus diminishing the labour pool and unemployment rate (also: In the east, almost all women worked; the west imported Turkish men instead during labour shortages of the 70’s-80’s). A surprisingly big number of the people who didn’t move are the kind that would vote for Trump in the US; unenlightened, disillusioned, incompetent at adaption.

    The Western system experienced a major shock, too. The social democratic system of split decision making between employee councils and company leadership (Not just Volkswagen!) broke down upon the thread of unemployment and labour surplus. The unified goverment spend an amount equal to the entire cost of the Iraq war every year (!) to rebuild Eastern infrastructure. Now the labour market is split between insiders and outsiders, hollowing out the middle class, the latter earning non-living wages like in the US.

    Eastern companies, land and values were sold off at rock bottom prices. The biggest irony of history is that farmers who were expropriated by the Socialists ended up leasing rather than owning their land, which was then auctioned off to investment funds, land speculators and giant food corporations – who tend to throw farmers off their land. So many of the few families who survived cooperatives…well, they didn’t survive capitalism in their profession.

    25 years after reunification, the country is finally healing and being seen more and more as one. But it was by no means an easy process, with two parts of the country much closer to each other in wealth and culture than North- and South-Korea are today. We’re also talking about the happy 90’s, a decade of splendid growth. Now most economic reporters see low growth, oversupply and bubbles everywhere.

    Tl;dr – meh.

    • 0 avatar

      “A surprisingly big number of the people who didn’t move are the kind that would vote for Trump in the US; unenlightened, disillusioned, incompetent at adaption.”

      I found your post informative, but this piece here struck me as a blanket large enough to cover a football field. I wouldn’t vote for Trump, but if you believe his support is confined only to this demographic, I think you’re mistaken.

      • 0 avatar
        chuckrs

        I wouldn’t willingly vote for Trump, but am faced with the choice between a blowhard and an incompetent. Further, the incompetent is guilty of deliberate and persistent violation of intelligence security requirements and implicated in public corruption to boot. She’ll probably skate on both issues. And while some of Trump’s successes are most likely accidental, his opponent can’t even show that.
        So what would you have me do, if not vote for the least worst choice?

        • 0 avatar
          Kenmore

          I strongly doubt Trump’s purported racism and xenophobia. I think he’s just an oafish, rich-kid bully who never bothered to develop attitudes like racism and xenophobia. He wasn’t forced to.

          But he can play to the Joe Sixpacks fairly well and many scared professionals are secretly in his camp, too, I dare say.

        • 0 avatar
          JimZ

          do what I’m going to do, and not bother voting. If I’m going to be stuck with a Sophie’s Choice, then I’d rather remove myself from the situation entirely.

          and don’t try to bring up that “if you don’t vote you can’t complain” nonsense. I can and will complain that the system we have expects me to choose between a giant douche and a turd sandwich.

      • 0 avatar
        Sjalabais

        Oh, I thought it was quite clear that this was a tendency drawn out to an extreme conclusion. I mean, to be honest, I can’t bend my mind around to a rational reason to actually vote for Trump, but it is clear as day that his candidacy is pathological for the system…it’s broken and it needs to be fixed. The underlying trouble with a lack of trust in institutions and the trouble of making everyone eligible to vote try to understand complex issues is the same everywhere.

        It is also true that many in the East had troubles adjusting to a new system, a jump not unlikely to be compared with factory workers having to find a new way of life in a society dominated by knowledge hierarchies and chummy capitalist networks that manage to produce steaming piles of injustice like TTIP (here I’m referring to the proposition that unelected companies might sue elected, representative governments over legislation).

        As to who I’d vote for…that’s difficult. Seen from Scandinavia, the US has a lot of politicians that praise a form of inflammatory christianity that would work well on the streets of Teheran – if no one had told them that their extreme flavour was just exchanged for a variety of islam. Bernie Sanders sounds like a normal European politician, but I’m not convinced European solutions would fit and function in the US. I don’t know. The balkanization of media makes it hard to find a solid, progressive centrist – especially in the US, where one tiny mistake over the course of a lifetime seems to be enough to be disqualified; unless you’re coocoo crazy like Trump. There are no normal people in this election.

        • 0 avatar
          Kenmore

          “Seen from Scandinavia..”

          Which never imported millions of slaves and bred them just as hard as it could, actively opposed acculturating their progeny for 100 years after slavery was abolished, only began permitting them economic opportunity once national decline had set in and now must devote a crippling portion of its bloating budget to safely corralling them in bestial areas and institutions of violence and drug abuse.

          We *are* exceptional, but for some pretty bad reasons as well as good ones. No other nation’s intelligentsia is competent to judge us except, perhaps, South Africa’s.

    • 0 avatar
      Kenmore

      Chilling and expert comment, Sjalabais. Thank you.

  • avatar
    Joss

    Build the car factories and use North Korean labor. Currently about 100,000 North Koreans are working outside the DPRK as a source of hard currency. This is happening after the Macau money-laundering closure and is risky as it exposes the North’s citizens to outside influence.

    Room 39 needs hard currency for military projects and internal political gift giving. This could be it.

  • avatar

    North Korean slave labor would put incredible stress on South Korean workers.

    North Korea is a BUFFER ZONE being used by China to keep America in South Korea at bay. Those people will continue to suffer based solely on the policies of China.

  • avatar
    bill h.

    I’m of Korean ancestry, but don’t claim any special insights because of that. Yet coworkers of mine who do study the Korean separation/unification issues know much about the cultural differences that now separate the two countries, despite a very deep seated (almost tribal) desire to re-unify. This is a very hard problem.

    I’ve also relatives who served in the ROK military who were involved with discussions with their DPRK counterparts in the DMZ some 30+ years ago, who would tell you that even the language–speaking style, vocabularies etc. of the two countries have diverged to the point that overcome even the regional differences in speech that have traditionally existed just in the South alone. Just listen to the cadence of a news broadcast from the North, then compare it to one from Seoul. You don’t need to understand the language to know these are very different cultures, despite the often identical words.

    Reading the stories about those who manage to defect from North to South, and the difficulties they have adjusting, tell me that any reunification will be extremely painful and could distract the two Koreas from other economic issues for decades. So I’m not sure I agree that a reunified country would be some sort of renewed industrial juggernaut. But it doesn’t negate the very real emotional desire to bring families and a shared cultural past together again.

    • 0 avatar
      DeadWeight

      I’m going “all political” (and humanitarian) here, but I genuinely feel deep sorrow for North Koreans, and those like them, whether in the middle east, South America, Myanmar, Sudan, and many other nations/regions whereby the masses are brutalized and exploited due to their immoral, depraved and inhumane “leaders/despots/thugs” holding power.

  • avatar
    CoreyDL

    The build quality of a North Korean Kia would be somewhere around 10x worse than an Irish-made DeLorean.

  • avatar
    Johnster

    I’ve heard stories about how illegal North Korean immigrants have made their way into China and they’ll do just about anything for wages below that that native Chinese get. The ethnic Koreans often pose as teenagers and get away with it because they have experienced years of malnutrition and are, on average, about a foot shorter than most Chinese of the same age. I’ve also heard that many North Koreans have suffered from minor brain damage as the result of many years of malnutrition.

    I also read a story about a North Korean electrician who immigrated to the South Korea. He told about how television and radio broadcasts from South Korea were blocked from being received in North Korea, and how when he was doing repairs he “accidentally” managed to catch a T.V. broadcast from South Korea.

    He said he watched part of a sit-com in which two women who lived in the same apartment building were fighting over a parking place. He went on to say that it completely blew his mind to think that people in South Korea were wealthy enough to afford privately-owned cars.

  • avatar
    Pch101

    “Hyundai needs North Korea to grow.”

    Hyundai is already operating production facilities in third-world locations such as India, Brazil and Alabama.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • mr_mike: Agree… Was excited about the Maxx in theory… It was in practice that I was totally let down....
  • Imagefont: As with gasoline powered cars, actual mileage varies in accordance with many factors. Saying an electric...
  • justVUEit: We had an “almost”. A bad ice storm crept up and was leaving a coating on everything. I did a...
  • JimC2: A gallon of gasoline can make about 15 hp·hr, which is 11kWh. 400-517 miles out of a 110kWh battery is...
  • Imagefont: Well, charging a battery to charge another battery is even more inefficient. And so called super...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Matthew Guy
  • Timothy Cain
  • Adam Tonge
  • Bozi Tatarevic
  • Chris Tonn
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber