Hopes pinned on Hyundai truce

The unionized workers of Hyundai Motor Company approved a tentative agreement with management yesterday, officially ending their drawn-out labor dispute.

The union has 44,970 members, more than any other in the nation, and announced early yesterday morning that 41,092 of them entered Monday’s ballot, with 52.7 percent voting in favor of accepting the tentative accord that was reached last Friday.

“This result was made possible because our members have been united from beginning to end,” the union said in a statement. “We are now free of having to work overnight, which has been our burden to bear for the last 45 years.”

Hyundai Motor’s Co-CEO Yoon Gap-han and Moon Yong-moon, the chief of its main labor union, were due to attend a signing ceremony for the agreement today at the company’s Ulsan plant.

It contains a wage hike and the adoption of two daytime work shifts.

The wage agreement includes a 98,000 won ($86.60) increase in monthly base salary, a one-time payout of 9.5 million won and bonuses worth 500 percent of a worker’s monthly salary, according to the union.

This is equivalent to an average of 27.3 million won extra per person, which would be the best pay raise in the company’s history, the union said in a statement.

The pact will implement daytime-only shifts starting in March. Employees will work from 6:40 a.m. to 3:20 p.m. for the first shift or 3:20 p.m. to 1:10 a.m for the second.

To maintain current levels of productivity, the carmaker said it will invest about 300 billion won in equipment and facilities to maintain output after working hours are reduced. It will also increase its social contribution fund to 5 billion won, up 1 billion won from last year.

Although the issue regarding transforming workers from in-house subcontractors to regular workers remains - a matter that will be discussed in a separate meeting in the next few weeks - Hyundai said it will make efforts to normalize production and boost sales.

Twelve recent incidents of industrial action from the union, the latest of which was staged last Wednesday for six hours, caused a production loss of 79,362 vehicles worth 1.646 trillion won, Hyundai said. This is the biggest loss caused by its striking union in the company’s history, exceeding a similar loss in 2006 by 2.1 billion won.

Hyundai’s domestic sales slumped 29.9 percent on-year to reach 35,950 vehicles in August, the lowest sales record in more than three years since monthly sales hit 35,396 units in January 2009. Meanwhile, 257,974 vehicles were shipped overseas, up 0.4 percent from a year earlier.

“Amid slowing sales at home and abroad, August shipments slumped due to a decrease in work days stemming from partial strikes and the summer vacation,” Hyundai said in a statement.

The nation’s No. 1 automaker is planning to make 4.29 million vehicles this year, 230,000 units more than in 2011.

Meanwhile, the industry is hoping the successful conclusion of Hyundai’s labor dispute puts and end to similar flare-ups at other automakers.

“Hyundai is seen as something of a standard-bearer for other carmakers’ wage negotiations,” said an employee at local carmaker.

By Joo Kyung-don [kjoo@joongang.co.kr]