Technology, human resources and international competitiveness in the Korean auto industry: the case of Kia Motors

Abstract

The case of Kia Motors highlights the problems of auto companies in Korea making the transition from a rather rigid supply-oriented mass production system to a more flexible demand driven lean production approach. This involves both technical and human resource issues. Comparing the experiences of two plants in the Kia Company (Sohari and Asan) it is shown that failure to more effectively develop and utilise employees' skills and to achieve harmonious employment relations impeded the ability of the company to introduce lean production in the Sohari plant. For the most part, Kia achieved a hybrid production system at Sohari but was more successful at Asan. The failure of Kia to make the transition to a more flexible system of production and management was a contributing factor to its failure to survive the economic crisis of the late 1990s.