South Korea's Battery Industry Raises Alarm Over Brain Drain to China
Xu Wei
DATE:  Nov 21 2017
/ SOURCE:  Yicai
South Korea's Battery Industry Raises Alarm Over Brain Drain to China South Korea's Battery Industry Raises Alarm Over Brain Drain to China

(Yicai Global) Nov. 21 -- The Chinese battery manufacturers are promising three to four times more pay for skilled engineers and research personnel from South Korea's battery industry, with those with 10 years of experience being promised an annual salary of KRW400 million (USD364,000) to KRW500 million. South Korea's battery industry is, therefore, raising alarm over a brain drain, Yonhap News Agency reported on Nov. 19.

As China prepares for the "rise in the battery industry" and makes large-scale investment, senior South Korean engineers are becoming the target. Those engineers and research personnel working for leading battery producers SK Innovation Co. [KRX:096770], LG Chem Ltd. [KRX:051910], and Samsung SDI Co. [KRX:006400] are being targeted by some major Chinese battery companies, a South Korean observer was quoted as saying.

Some 30 to 40 percent of key personnel in the South Korean battery industry may be targeted, with majority of them having been possibly contacted by the headhunting firms, who are collecting relevant personnel information for the Chinese enterprises, the Yonhap report claimed. Some of them may have received offers. A Chinese new energy vehicle company has contacted at least over 100 South Korean engineers, it said. It is quite possible that many will find it hard to resist the generous wages of the Chinese companies and jump ship, Yonhap warned.

To attract the talents, the Chinese enterprises not only provide conveniences, such as translators, but also offer them exceptionally generous wages. BYD Company Limited [SHE:002594] recently made an announcement to recruit talents from the South Korean battery industry. Apart from the basic salary, they are offered with performance pay, year-end bonuses, transportation subsidies, car subsidies and other advantages. The company has been actively recruiting talents from South Korea since last year, and recently appointed senior technical South Korean staff to high positions, strengthening its technological competitiveness. Another Chinese auto maker has also recruited senior research staff from the research institute of a South Korean company. There is a limit for the South Korean companies to stop the technical personnel from leaving, an industry insider was quoted by Yonhap as saying.

To have outstanding research and development (R&D) personnel is the key to the success in the battery industry. In order to catch up with South Korea and Japan, China also needs to recruit senior personnel in addition to the huge investments. As the world's largest car market, China plans to build an electric car market with annual sales of 600,000 by 2020. It is adopting all kinds of policies to firmly support the industrial development.

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Keywords:   MSCI,BYD,Automotive Battery