Union rejects Hyundai Motor’s latest proposal

Hyundai Motor tried to wrap up this year’s wage negotiations before the Chuseok holiday next weekend by making a new offer, but the deal was rebuffed by the labor union.

According to the labor union on Wednesday, Hyundai Motor President Yoon Gap-han offered to raise monthly base pay by 79,000 won ($67) in the 25th round of negotiations held Tuesday at its Ulsan plant in South Gyeongsang. The offer also included an annual bonus of 2 million won plus 300 percent of a worker’s monthly salary, as well as an adjustment to the production line system that would reduce working hours.

The union, led by Lee Kyung-hoon, rejected the offer, saying it was “unreasonable and provided without careful thought.” It urged the nation’s largest automaker to provide another offer to wrap up the saga as soon as possible. The labor union is currently demanding the company raise base monthly pay by 159,900 won, a 7.84 percent rise from a year earlier, and extend the retirement age from 58 to 65 with some bonus options.

Though it doesn’t appear that the negotiation is making much progress, industry insiders said there’s a good chance the two sides will reach a deal before the Chuseok holiday.

“Since this year’s wage negotiation table was set later than last year, the workers don’t have enough time to carry out a strike [before Chuseok and October, which is a critical month
for automakers],” said Kim Jin-woo, an analyst from Korea Investment & Securities.

Kim explained that workers know the strike won’t be effective because people will stop paying attention to the saga over the upcoming holiday, reducing their leverage with the company. Management also wants to conclude the deal because the company wants to boost its recently sluggish performance, and if the strike continues into October, it could impact overall sales in the fourth quarter.

It would be hard for the union to ignore the current situation of the company, which has faced strong competition from foreign rivals recently. The labor union is also pressured by the fact that other domestic automakers - Renault Samsung, GM Korea and Ssangyong Motors - concluded their wage negotiations in August without any strikes, saying that it doesn’t make sense to fight over salaries when the economy is struggling.

The negotiations are also important because their outcome could affect the other negotiations taking place at Hyundai Motor Group affiliates like Kia Motors and Hyundai Steel.

Kia Motors said Wednesday it will ask its 34,000 union members whether they should go on strike. The union of the nation’s second-largest automaker and its management held eight rounds of negotiations until Sept. 9 but failed to reach an agreement. The workers currently demand the company raise monthly base pay by 159,000 won, a 7.7 percent rise from a year ago, but the company says the amount is too high.

BY KWON SANG-SOO [kwon.sangsoo@joongang.co.kr]