Particular interest is on GM -- the biggest U.S. carmaker and the one experiencing most problems, including sales declines. GM once boasted sales comparable to Korea’s GDP and was the proud symbol of America’s mighty automotive industry. To look at its current troubled state makes one ponder the irony of the fates of corporate giants.

With private consumption falling amid the financial crisis, sales have declined more than 30 percent compared to the last year. Under such circumstances, a knock-on liquidity crisis might seem natural. But American public sentiment remains unsympathetic to GM’s problems. This is because the difficulties being felt by U.S. automakers are largely of their own doing. Many say they stem from wanton management practices, but a closer look shows that the various interests of different groups are interwoven in a complicated web.

First of all, too many different automobile brands were manufactured under a complicated network of subcontractors. This hindered efficient, rational management, coupled with the seemingly amoral standards of their top officials, who were bold enough to fly to Washington on private jets to seek financial aid.

The powerful unions cannot escape blame either. The hard-line United Autoworkers Union (UAW), established a high-wage system by threatening strikes. As a result, the average hourly wage in Detroit, the automaking capital, has almost doubled the levels of the southern American states.

The clout wielded by the powerful union not only affected workers’ wages and medical benefits, but also pensions and other benefits, to levels their employers are struggling to keep up with. As a result, American carmakers have been stuck with a high-cost structure that has made production costs thousands of dollars higher than those of Korean and Japanese automakers.

Moreover, politicians are wary of unionized workers and have been reluctant to criticize them. There is even talk that president-elect Barack Obama is supporting financial aid for the automakers, because he needs to repay UAW members who voted for him. For these reasons, the American car industry is not just suffering the effects of the financial crisis, but from a chronic illness that stems from structural problems.

The latest crisis for U.S. automakers includes a poignant message for the Korean auto industry. The aforementioned problems are already emerging in Korea. Hyundai Motor is maintaining a high-wage level that has made the per-capita income at Ulsan, where the automaker is located, the highest in Korea. But each year, Hyundai’s union demands increases in various allowances and welfare costs, producing dream conditions for subcontractors, whose workloads are similar to Hyundai's employees.

Yet unionized workers at Hyundai Motor have made strikes an annual occurrence, and management usually buckles under the pressure of their demands. Some lawmakers have even begun to support unionized workers. Korea’s auto industry is looking exactly like the U.S. auto industry of 20 years ago. That Korea’s auto industry may benefit from the troubles faced by the Big Three is an extremely shortsighted view. If management and labor at Korea’s automakers fail to reform their structure, they will eventually cede their status to rivals in China or India.

The column was contributed by Lee Doo-won, a professor of economics at Yonsei University.