Hyundai avoids strike for first time in 15 years
A labor union member of Hyundai Motor at the production line of the company’s Ulsan plant yesterday reads a flyer about the tentative agreement reached between union representatives and management late Monday. [YONHAP]
Hyundai Motor, Korea’s leading automaker, said yesterday that both labor and management tentatively agreed late Monday night to freeze next year’s wages at the company’s plant in Ulsan.
In return, company workers will each receive a bonus of roughly 15 million won ($12,700) each. It’s the biggest bonus that the automaker’s workers have ever received. The bonus includes 300 percent of the monthly salary, or around 6 million won per person, as well as a 5 million won incentive payment and 40 company shares, valued around 4.5 million won.
Additionally, both sides agreed that the company will pay full educational tuition for a worker’s first three children. Previously the company only paid full tuition for the first two children and 50 percent of the tuition for a third child. The two sides also agreed that a worker would get a three-day vacation when his spouse gives birth.
Union members will vote on the agreement today.
“Instead of bickering over ambiguous expectations we have reached a rational agreement that considers both the reality and the future of the company,” said Kang Ho-don, Hyundai Motor vice president. “We hope that the members of the union would make a wise decision.”
Monday’s agreement is a major break for a union that was established in 1987.
Other than in 1994, the union has called a strike each year resulting in massive losses for the company. The automaker’s public image was also damaged because workers would stage the violent walkouts regardless of the economic situation.
Between 1987 and last year, strikes cost the company production of 1.1 million vehicles resulting in 11.7 trillion won in losses. With the strike likely to be avoided this year, the company will save up to 560 billion won, which otherwise would have added to this year’s total losses. Additionally, this was the first time in the union’s history where labor representatives agreed to freeze wages.
“The agreement is a win-win strategy for both the labor union that has chosen a moderate stance and for the company that is enjoying its best performance yet,” said Suh Sang-moon, an analyst with Korea Investment and Securities.
“It is a positive note that labor and management negotiations have gone smoothly without affecting production in the fourth quarter.”
However, other analysts say that the massive bonuses will likely affect the company’s fourth quarter profits.
By Lee Ho-jeong, Lee Ki-won [ojlee82@joongang.co.kr]
with the Korea JoongAng Daily
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