Samsung Electronics' Gumi plant was its main production facility for mobile phones until 2006. In 2005, when the electronics giant set a milestone by selling more than 100 million mobile phones worldwide, the plant rolled out 70 million handsets. But now its main phone production facility has moved to Vietnam. The plant there went into operation in 2009, and its output apparently accounted for more than 30 percent of Samsung's global mobile phone production last year.
The Gumi plant now accounts for less than 20 percent. "Gumi continues to produce high-end smartphones, including the Galaxy Note, but it won't be easy for it to regain its former glory," a Samsung staffer said.
This is a textbook example of a major conglomerate boosting overseas recruitment. The Chosun Ilbo analyzed the hiring patterns of Samsung Electronics and Hyundai Motor from 2007 to 2011 and found that they hired four workers overseas for every one in Korea.
Samsung employed 16,173 new staff in Korea over that period, but overseas staff numbers rose by 67,453. The argument is that an export-dependent company has no choice but to increase investment overseas and hire more workers there, but there are concerns that this trend leads to job losses here.
Samsung's proportion of overseas staff to total workforce has surpassed 50 percent for the first time. Out of a workforce of 221,700, only 102,000 are employed in Korea. The ratio of overseas staff stood at 49.8 percent in 2010 and rose to 54 percent as of late last year mainly due to more plants built abroad.
Last year, Samsung hired 59,000 workers around the world, including 15,000 in Southeast Asia.
Hyundai Motor's overseas staff also grew almost 50 percent over the last five years. Last year alone, it hired 5,400 more workers overseas as it opened a new plant in Russia and expanded a Czech plant.
The hiring imbalance becomes even more marked when comparing job growth in Korea and abroad. For five years since 2007, hiring growth in Korea averaged a mere 0.8 percent a year but 8 percent overseas.
From one perspective, Samsung and Hyundai have no choice. Competition is growing more intense in the global markets for IT products and cars, and countries around the world are raising trade barriers. The problem is that both Samsung and Hyundai are slow to invest in their home market due to rising wages and militant labor unions here.
Hyundai opened three plants in China this year and plans to open one in Brazil next year. Industry watchers say the carmaker's increased overseas production is an attempt to minimize production losses due to frequent strikes here by its hardline trade union. As a result, concerns are rising over a steady decline in jobs here while Korean conglomerates grow fatter.
"High wages and militant unions are prompting more and more major conglomerates to avoid building more factories here," said Yoo Kyung-joon at the state-run Korea Development Institute. "If export-driven conglomerates neglect hiring workers in Korea, this could lead to huge social repercussions put a great strain on the economy."