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2 major automakers still at loggerheads with their unions

Dec 12,2019
While peace reigns over much of the auto business, two automakers in Korea are still struggling to reach an agreement with their unions.

Renault Samsung Motors and GM Korea just can’t seem to achieve a compromise with their workers, and breakthroughs could be difficult to achieve.

Kia Motors said Wednesday that its management and union signed a tentative agreement Tuesday. It will be put to a vote by workers Friday.

Under the tentative agreement, the automaker will raise basic salaries by 40,000 won ($33) a month. As for performance-based incentives, 150 percent of the basic monthly salary as well as 3.2 million won in cash will be granted.

The initial agreement was reached just two weeks after new board members were chosen from the union.

In early September, Hyundai Motor achieved an agreement on wages with its union without a strike for the first time in eight years.

The union for the largest automaker by sales in Korea recently elected a moderate leader who is more likely to talk to management than organize strikes.

SsangYong Motor, a Korean unit of India’s Mahindra & Mahindra, was the first local auto manufacturer to reach an agreement with its union over wages this year. The automaker had no dispute with its union over the past 10 years of negotiation.

Elsewhere, battle lines are being drawn.

On Tuesday, unionized workers at Renault Samsung Motors voted to strike in protest against the automaker’s wage freeze proposal for this year.

According to the union, 66.2 percent of the 2,000-member union agreed to strike for an increased base pay and better working conditions. The workers already earned the right to strike after the National Labor Relations Commission ruled Monday not to intervene.

The union has been asking for an 8.01 percent raise in base pay, a bonus of 4 million won and a promise for more new hires. Renault Samsung Motors is refusing to accept, as its sales and vehicle production at the Busan plant have suffered throughout the year.

Between January and November 2019, the Korean unit of Renault Group sold a total of 161,733 units, down 23 percent from 209,126 units posted during the same period last year. The company’s volume has been falling, as its production contract with Nissan for Rogue SUVs came to an end in October.

GM Korea is also facing potential threats, as an aggressive leader in favor of walkouts was voted to head its union. GM Korea and the union plan to meet early next year after wage negotiations collapsed in October, and walkouts are possible.

The Korean unit of U.S. automaker is also in a dispute with 585 contract workers at its factory in Changwon, South Gyeongsang, it fired last month after its factory operation rate fell.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]


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