The Future of Work Podcast

Hello and welcome to the ILO's Future of Work  podcast. I'm Steve Needham. Thailand's automotive  

sector produces around 1.45 million vehicles  each year and employs close to a million workers.  

But today, the industry is navigating major  transformation: the shift to electric vehicles,  

the rise of automation and AI, and  growing expectation from workers,  

consumers, and global markets. In this changing  environment, responsible business conduct or RBC  

is becoming increasingly important. RBC covers  many areas from environmental responsibility to  

supply chain due diligence. But at its core,  it also includes something more fundamental:  

how companies engage with workers and  their representatives. In this episode,  

we ask how dialogue and good labour relations  between management and unions can help companies  

remain competitive while protecting workers  during a period of major transition. To explore  

these questions, I'm joined by Georg Leutert,  Director of Automotive and Aerospace Industries  

at IndustriALL Global Union, a global trade union  federation representing workers in mining, energy,  

and manufacturing. and Satirayuth “Max” Sangsuan,  Vice President of Auto Alliance Thailand,  

a joint venture between Ford and Mazda and one of  Thailand's largest vehicle manufacturers. Georg,  

Max, welcome. Thanks so much and thanks for having  me. Great to be with all of you today. Let's start  

with the basics. Georg, what does responsible  business conduct mean to you? I think from a union  

perspective, it really means that there is a union  at all. So the the company does not exclude the  

workers to have a collective voice and enter into  negotiations and into a constructive dialogue.  

That's number one. And that of course they also  allow for collective agreements to be negotiated.  

And then finally it's everything around what I  would call the democracy in the workplace. So  

there is continuous exchange between the parties  and a common spirit of of finding solutions  

together to make it better. And finally there  is this dimension of the society. So a factory  

is not an isolated place. It is always embedded in  the society and it needs to have this broader view  

to do good things for the society as well. And Max  from an industry perspective how would you explain  

RBC? My understanding RBCS means cooperative,  means co-creation, means productivity,  

means industrial peace, means win-win solutions,  means sustainable labour relations. It means  

trust between one another. It means continued  improvement, continued investment, you know,  

from the parent company to AAT to the company and  make us have the rapid growth and make us continue  

our operation in AAT in Thailand forever. This is  the RBC in my view. And what does this look like  

day to day at Auto Alliance Thailand? When we have  the the target of the production, for example this  

year we aim to produce 150,000 units. We share to  the employees, we share to our labour union and we  

break in two months that how many units that we  are going to produce per month. So those sort of  

things that we share, we inform and we listening  to the employees' voice and that kind of target  

we'll exchange you know with the success in terms  of the objective setting back to the company. And  

how are you achieving this kind of collaboration?  Every time when we have the labour negotiation  

and my senior management said that, you know, why  don't we change our mindset you know from labour  

negotiation to be constructive labour discussion.  We have constructive discussion. So we provide the  

good benefit and welfare for the employees. Before  we're doing that, AAT or the company is supposed  

to have the profit. Without any profit, we cannot  provide, you know, something like, you know,  

the good benefit and welfare for the company. Just  change the mindset you know that of the senior  

management that once we have the constructive  labour discussion I am confident that, you know,  

that both parties: management and the labour  union, you know, that we're going to have the  

win-win approach and, you know, that both party  will reach the target. The global auto industry  

is obviously undergoing major transformation.  Georg, how important is RBC in that context?  

It's of tremendous importance actually, because if  you look at what is happening already today in the  

Global North is that many, many auto workers  are losing their jobs due to the introduction  

of electric vehicles and which means less work  right because these electric vehicles are less  

complex from a parts perspective. And also because  there's more and more digital systems introduced  

etc etc. So we see like in Germany for instance  over 100,000 auto jobs were lost last year and  

we see the same tendencies in other European  countries, in the U.S., partly in Korea and in  

Japan, and also in in some countries of the Global  South. What we also see is that companies in most  

of the cases try to take quite a responsible  stance where because they are willing actually  

to compensate the workers quite substantially from  a financial perspective. But at the very end the  

solution of course is that these colleagues  leave the company and lose their jobs. And I  

mean these jobs will be lost forever, right?  So they will probably not come back and then  

I guess responsible business conduct in this  context of the transformation should even mean  

more, because we have to look at the society  as such. And in this context I would say that  

it's not only about responsible compensation  payments, we should particularly think about re  

and upskilling and try to make sure that most of  these guys find a new job. And if they don't find  

it in the auto industry then maybe they find it in  other industries which are emerging. And I think  

in this context we are saying to the companies  – a lot of companies today particularly the auto  

companies – let's work together to make sure that  this re and upskilling part gets much more of a  

focus, of an importance than in many cases today.  Max, when people hear about automation, usually  

the introduction of robots or co-bots, which  are robots which work alongside human workers,  

they often think of job losses. How are you  managing that transition? You know when we have,  

let's say when have robot, we have co-bot  coming in order to help, in order to support  

the operation, we clearly explain to our employees  that you are going to rotate to the more benefit,  

to the higher responsibilities, job and  responsibilities. We never say that, you know,  

once we have the robot, once you have the co-bot  coming in, you are going to be terminated. No,  

we never say that. You're going to be assigned  to the higher responsibilities, because you know  

that the more you work for companies, the higher  the experience. And we need experienced people,  

you know, to create, to assemble the best vehicles  to the customers worldwide. We need everyone. We  

need all of you. We need our experienced employees  working with us. We've talked about what happens  

inside AAT, but the automotive industry is  built on vast global supply chains. Georg,  

is bringing stakeholders together enough? Yeah,  again first of all congratulations to AAT. I think  

also this transparency that they create is super  important. On a broader scale, we are also making  

quite positive experiences with multistakeholder  initiatives in different contexts where we bring  

together different layers of of supply chains with  OEMs (original equipment manufacturer) and with  

unions, governments, academics or whatsoever.  So overall, this is normally very positive and  

in many cases it can really do magic, because  some countries do not have these experiences.  

They're not familiar with these kind of settings  and in the beginning, as Max said, they're maybe  

not so keen to join, but then once they're there  they understand that it makes a big difference  

to be around the table, to see each other not talk  about each other but talk with each other. So that  

makes a huge difference. And I think in this whole  context also along supply chain due diligence,  

this is a super important aspect for us to  follow, because these supply chains are complex  

and bringing the guys together is the right, I  think is the right approach. But there's also one  

thing I think which is important – like bringing  the guys together and the different stakeholders  

together is important and can have a value – but  we also must make sure this does not end up like  

in a talking club with a nice atmosphere  and then nothing comes out, particularly  

in supply chains. I mean, let's be honest. We  all know the automotive industry there is quite  

a hierarchy. There's the OEM, so the original  equipment manufacturer, in this case AAT, that  

builds the cars and then there are many many many  suppliers and they are on different tier levels.  

So there is bigger suppliers, smaller suppliers  and it's a huge network of ten thousands of  

suppliers for each automaker. And there is also,  I mean the lower you are in this supply chain,  

the less power you have. And what's stopping  smaller suppliers from adopting this approach?  

There's a lot of price pressure, cost pressure on  the suppliers and it's getting, it's increasing  

from tier to tier. So that's one thing. And then  of course, you have, the smaller the business gets  

you often have family business also which are  maybe not so familiar, they also need training,  

sometimes, yeah, they also need training on  existing legislation, but very often it's,  

they are not familiar with this. And then the cost  plays a big role, and they think, like, a union  

will increase my cost so therefore I don't want  unions. And that's, yeah, not acceptable actually  

and we can do better I guess. Max, AAT has worked  with ILO to help encourage companies in your  

supply chain to embrace RBC. How has the response  been? I will say thank you to ILO Thailand that  

you provide, you know, that good training class,  you know, not only for AAT and our labour union,  

but we are trying to get something like at least  20 AAT suppliers to have the same understanding,  

this kind of training conducted by ILO Thailand.  And we have received lots of positive feedback,  

you know, from our suppliers. At first they  feel not comfortable when AAT invite them to  

to join the meeting, the training, five days of  training. So our conditions, we request that you  

supposed to have one, at least, you know, one HR  supposed to have at least one or two labour unions  

working together, joining together. What kind of  things do you cover in these training sessions?  

You learn from one another and that you just open  your heart and we learn from, and we respect one  

another and this is one of the key successes. We  are not sitting on the different side, but we are  

sitting together in one room, in one table. And if  you could both leave one message about responsible  

business conduct in the automotive sector what  would it be? Georg? In the current times of  

transformation the most important thing is that  employers and unions agree on ways to manage this  

transformation without everybody losing the jobs,  and particularly put re and upskilling into the  

focus. And the other message is, I mean, there's  there are super companies such as AAT, but there  

are also a lot of companies out there which are  performing totally different. They avoid unions.  

They don't want to listen to their workers  at all. And we've got to find ways on how to  

convince these guys as well. Max? My final  message, you know, that AAT management,  

our parents company we cannot success, you know,  without our employees working with us. We have  

5,000 employees and everyone are part of the  key AAT success. We trust them and we need to  

to provide everything more transparency. We  trust them and before we are doing some new  

policies unions are always getting involved, you  know, with the company. They should know well,  

they should understand and I believe that once  they understand, they will support. Well that's  

all we have time for today. I think what stands  out from this discussion is that responsible  

business conduct is not just about compliance  or standards, it's about building trust,  

dialogue and shared solutions between companies  and workers. And as the automotive industry  

undergoes rapid transformation, the real challenge  is not only technological change, but how that  

change is managed. My thanks go to Georg Leutert  and Max Sangsuan for joining us and sharing their  

insights. Thanks also to you, our listeners.  If you'd like to learn more about responsible  

business conduct and the ILO's work in this area,  you can visit the ILO website at www.ilo.org.

You can also stay up to date by following the ILO  on social media. Our handles are @ilo on Facebook,  

LinkedIn, Tik Tok, and X and @ilo.org  on Instagram. Once again, thank you for  

listening to the ILO's Future of Work podcast.  Please join us again next time. Goodbye.