Automaker’s union elects a moderate

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Automaker’s union elects a moderate

Hyundai Motor workers returned to office a former union leader seen as more moderate than the incumbent, who led strikes that caused record annual production losses at Korea’s largest automaker.

Lee Kyung-hoon, 52, was backed by 52 percent of the 47,000-member union in a vote on Friday, defeating Ha Bu-young, 53, according to the union’s Web site.

Lee will replace Moon Yong-moon, whose leadership over the past two years came to be considered a sign of resurgent militancy at Korean labor unions amid a shift of production overseas.

Hyundai Motor, which has suffered strikes in 22 of the past 26 years, had its longest stretch of uninterrupted production during Lee’s previous term, from 2009 to 2011.

“Hyundai’s biggest threat and risk has been its union in Korea, which would go on strike almost every year,” Shin Chung Kwan, an analyst at KB Investment and Securities, said by phone. “Lee winning the election will be a relief for investors.”

The Seoul-based carmaker has lost production of more than 1.3 million vehicles valued at 16 trillion won ($15 billion) due to strikes since the union’s formation in 1987, according to company estimates. Past worker protests have led to clashes between police and unionists armed with steel pipes and Molotov cocktails.

Hyundai, which has suffered strikes in all but four years since its formation, lost output of more than 215,000 vehicles equivalent to 4.4 trillion won of sales due to stoppages during Moon’s term.

Nationwide, the number of work days lost due to labor disputes more than doubled last year from two years earlier, according to data from the Ministry of Employment and Labor.

Lee, who joined Hyundai in 1986, has promised to cut working hours to 40 a week for all employees by reducing afternoon shifts by an hour, increase base salaries and bonuses, eliminate conditions for employees to keep working until the age of 60, and to have the company distribute 60 shares to each worker, according to his campaign Web site.

Hyundai’s profit for the three months ended Sept. 30 increased for the first time in four quarters, climbing 5.6 percent from a year earlier to 2.14 trillion won, the company said Oct. 24. Rising sales in emerging markets including China, where deliveries jumped 15 percent, helped cushion the fallout from a three-week strike at Hyundai’s Korean plants that began Aug. 20.

Hyundai’s Korean workers approved a wage agreement on Sept. 9 that raised annual pay by 28.8 million won per worker, including an average increase in base salaries of 5.1 percent, according to the union.

The automaker faces challenges overseas from a strong won, which has gained about 28 percent against the yen in the past year.

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