SEOUL, Nov 29 (Reuters) – South Korea will offer “tailored” incentives to encourage Tesla to set up an electric vehicle gigafactory in the country and will minimise any risks posed by militant unions, President Yoon Suk-yeol told Reuters.
Yoon held a video call with Tesla Chief Executive Elon Musk last week and Yoon’s office cited Musk as saying South Korea is among the top candidate locations for a new Tesla factory.
“If Tesla, Space X or other companies are considering more investment in Korea including constructing a gigafactory, the government will do our best to support the investment,” Yoon told Reuters during a broader interview in his office on Monday.
Yoon said South Korea offers highly skilled workers and his government would ensure regulations align with international standards so that foreign firms do not face unexpected financial or regulatory hurdles.
“We are preparing a tailored approach to grant some advantages to these specified companies,” Yoon said through an interpreter, when asked about what advantage South Korean can offer to Tesla over other locations being mentioned.
Tesla has said it would consider building another gigafactory. Canada, Indonesia, India and Thailand have also been mentioned in media reports as possible locations, but analysts noted that those countries do not have the kind of automotive supply chain that South Korea does, although some are abundant in natural resources like nickel.
Yoon credited his government’s tough response to labour union strikes this year for starting the process of establishing a rule of law in industrial relations for both management and labour.
Yoon’s government is taking steps to use an administrative order to force unionised truckers to go back to work after talks aimed at ending their strike ended on Monday without an agreement.
About 9,600 truckers have joined the strike organised by the truckers’ union, demanding a permanent guarantee of a minimum freight rate to protect against rising and unpredictable fuel costs and overwork.
“The militant union culture is a serious problem in South Korean society,” Yoon said. He said he told Musk the goal of his labour policy is to establish the rule of law to eliminate the risks of unfair labour practices.
South Korea saw an average of 39 days of work stoppage annually due to labour disputes over the past 10 years, nearly five times higher than that of the United States’ eight days and nearly 200 times higher than Japan’s 0.2 days, according to the Korea Enterprises Federation.
Yoon blamed frequent compromises made by previous governments with powerful labour unions for creating a vicious cycle of illegal strikes leading to more severe strikes and unlawful action by labour unions.