A vicious circle of demands

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A vicious circle of demands

Union workers at Korea’s largest automaker, Hyundai Motor, went on four-hour strikes twice this week in protest of company management’s refusal to meet their demands for wage and benefit increases. The partial walkout could be extended if collective negotiations break down.

A prolonged labor strike would be a disaster for both the automaker and its workers amid the economic slowdown at home and abroad. Industrial disruption at one of the country’s largest manufacturers and exporters could also deal a blow to the already fragile economy. Both sides need to address the strife with urgency and good sense. But it should be the union that yields more, because its demands are unacceptable for several reasons.

First of all, it’s demanding too much for any company to handle. Hyundai Motor’s unionized employees receive an annual salary of nearly 100 million won ($89,469) on average, among the highest in the country. Yet they are demanding incentives tantamount to 30 percent of last year’s net profit. In addition, they want the company to pay 10 million won to each of the employees whose children fail to go to college so the kids can cultivate technical skills. College tuition for children of employees is already taken care of by the company.

What they’re asking for could stir up resentment from not only nonregular workers, but also from other industrial fields. They come across as a greedy and selfish group that will never be content.

Most problematic is the union’s persistent demand that management should get approval from the labor-management joint committee on decisions to expand or build factory lines overseas or to produce new models on foreign soil. This amounts to a clear breach of management jurisdiction. If Hyundai Motor accepts this, similar demands and labor conflicts will appear in workplaces across the country.

Second, revisions to the pay system that management proposes need to be accepted by the union and should be implemented. What the company suggests, including an introduction of salary peaks, can ensure job security and help the organization sustain its competitiveness. Again, the company can set an example in other collective negotiations.

Hyundai Motor has compromised with the labor union, even on excessive demands, in order to stop the strike as quickly as possible. The no-work, no-pay principle rarely applied. That’s why the automaker goes through strikes and walkouts routinely every year. Why not strike when it can lead to more benefits? But the company must put its foot down this time, or it will find itself in the same predicament next year.
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