Still more to do at Hyundai

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Still more to do at Hyundai

After seven months of struggle, Hyundai Motor’s labor union and management have tentatively struck a deal on wage negotiations. The labor union accepted the management’s demand of a wage freeze, while management promised job stability and bonus payments.

If the union votes up the deal, Hyundai Motor will be able to conclude wage negotiations without a strike for the first time in 15 years.

Hyundai Motor’s union is notorious for its extremism, but its decision not to strike was apparently triggered by changes in the organization that began this year. More and more unions are leaving the militant Korean Confederation of Trade Unions, and more and more companies and their unions are adopting “peace treaties” for mutual survival. No matter how militant a labor union is, it is hard to justify striking now.

Hyundai Motor’s management and union must use this opportunity to blaze a path to mutual survival. To this end, they must correct their impractical collective bargaining terms and restructure their negotiation methods. Furthermore, the unfair agreements that give the union authority to intervene in personnel affairs and automation must be reformed.

Management must also reform, as it is partly responsible for the repeated strikes. If correcting an irregularity meant disturbing production, management has believed that it’s better to turn a blind eye. Such an attitude fueled hostility.

The business community is still criticizing Hyundai Motor for yielding too much to avoid a strike. In return for freezing wages, the carmaker agreed to pay about 15 million won in bonuses to each worker.

The company said the bonus payments were fair because business was great this year, but the business community criticized the amount as too large, even considering profits.

Furthermore, this year’s business boom was based on government support with tax money meant to prevent a crisis in the auto industry. Therefore, the profits should be spent on research and development to pay back the nation, rather than on bonus payments to workers.

For Hyundai to be free from such criticism, labor and management must agree to a standard for passing on losses and gains in the future.
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