[Teheran-ro] The Yellow Envelope Act Threatens Foreign-Invested Companies

The so-called Yellow Envelope Act, an amendment to the Labor Union Act, has become a major issue in the Korean economy and is being discussed in various circles. Recently, the debate has intensified over whether the Yellow Envelope Act is a factor behind rumors of GM Korea Company’s possible withdrawal from Korea.
At a recent forum held on the 4th at the National Assembly Members’ Office Building to discuss sustainable development strategies for GM Korea Company, the Yellow Envelope Act was once again brought up.
A representative from the Ministry of Trade, Industry and Energy (MOTIE), who appeared to focus on general remarks, stated, "It is true that GM’s domestic sales have been sluggish, and recent developments such as the sale of directly operated service centers and concerns over labor-management relations, including the Yellow Envelope Act, have fueled speculation about GM Korea Company’s withdrawal." In response, Lee Yong-woo, a lawmaker from the Democratic Party of Korea (DPK), immediately refuted the MOTIE official’s comments, saying, "You need to study the Yellow Envelope Act more," and pointed out, "If that is the current public perception, it is a highly distorted view."
However, the perception among foreign-invested companies in Korea seems to align more closely with the position of MOTIE than with the ruling party. Foreign-Invested Companies in Korea have expressed negative views on the new government’s major labor policies. The Yellow Envelope Act was the main reason for these negative assessments, with more than half of the companies viewing the legislation unfavorably. While these companies had responded positively to policies such as the 4.5-day workweek and extension of the retirement age, their reaction to the Yellow Envelope Act was markedly different.
Foreign-Invested Companies in Korea strongly criticized the amendment to Article 2 of the Labor Union Act, which expands the scope of workers eligible to form unions and the employers required to negotiate with unions. This criticism stems from concerns that strikes could become more frequent. Notably, even among foreign-invested companies without unions, a majority responded negatively to the Yellow Envelope Act. This indicates a growing perception of union-related risks in Korea.
Rumors of GM Korea Company’s withdrawal are not an immediate issue. It remains uncertain what General Motors (GM) headquarters will decide after 2028, the year until which it has committed to maintaining its business in Korea. The situation remains challenging. Some even suggest that, were it not for the financial support received from the Korean government, GM would have already pulled out.
The increasingly vocal labor unions are now seen as a visible threat, rather than an invisible one, to foreign-invested companies. This does not mean that GM’s demands should be unconditionally met. At the same time, only listening to the unions’ voices is not the answer. The ruling party should not simply rebuke public officials. Instead of taking sides, it is time to consider what is truly needed and to seek genuine balance.
hjkim01@fnnews.com Reporter