Auto labor unions vote to strike

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Auto labor unions vote to strike

Tensions are rising in the Korean auto industry as some labor unions have resolved to strike following faltering wage negotiations with their management.

According to GM Korea, its labor union approved a strike with 69.3 percent of members voting in favor on Monday and Tuesday.

The management of Korea’s third-largest automaker and the union first met in late April and have met 14 times since, but they could not come to an agreement.

The union has asked the management to increase the base wage and to create a long-term plan for new car projects. GM Korea is already facing a risk of reduced production after General Motors decided earlier this year to withdraw its Chevrolet brand in Europe.

Last year, GM Korea’s union conducted a partial strike for 20 days which prevented about 23,000 vehicles from being produced on time.

Last week, the labor union of Renault Samsung Motors also decided to strike with 90.7 percent approval. The union had asked management to raise base pay, which has remained unchanged for the past two years, while urging the company to follow last year’s wage agreement.

Although unions from the two automakers haven’t announced when they will strike, industry insiders speculate that it will come soon, as negotiations have stalled.

The industry is also concerned because negotiations at the nation’s largest automaker, Hyundai Motor, are also not making progress. In past years, the company has been a barometer of the success of wage negotiations in the industry.

According to the company, the two sides have met eight times since starting negotiations last month but have nothing to show for it.

The union has asked for members’ base pay to be raised by 159,614 won ($157), and for 30 percent of the company’s net profit to be allocated to workers. The union has also demanded a guaranteed retirement age of 60 with no optional conditions.

To secure higher base pay, Hyundai Motor’s union is planning to form an alliance with other Hyundai Motor Group affiliates to put pressure on the automotive group.

Industry observers predict that the negotiations will take longer than last year since the base wage issue is on the table. Hyundai said it will make a decision after the court makes its final ruling on the trial it is facing.

Regardless, Hyundai said it wants to avoid a strike if possible.

Last year, the company saw losses of 1.02 trillion won after the union strike led to a disruption in the production of more than 50,000 vehicles.

Its smaller affiliate Kia Motors lost 413.5 billion won after not producing more than 23,000 vehicles it had planned.

Ssangyong Motor said that it wants to end this year’s negotiations peacefully as it has in the past. The company, now owned by India’s Mahindra, has not had a strike for the past four years.

BY joo kyung-don[kjoo@joongang.co.kr]



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