Labor unions of Hyundai Motor plan wage strike

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Labor unions of Hyundai Motor plan wage strike

Labor unions at Hyundai Motor and its 14 affiliates vowed to go on strike next month unless the companies meet their wage demands.

Workers at Korea’s largest automaker and affiliated companies including Kia Motors and Hyundai Mobis plan to put down their tools beginning Aug. 18 if management refuse to count bonuses as base wages, Lee Kyung-hoon, union leader at Hyundai Motor, said at a press conference in Ulsan yesterday. Lee was joined at the briefing by 19 other union leaders of the 14 affiliates under the umbrella Hyundai Motor Group.

The inclusion of bonuses has been the main issue at this year’s annual wage negotiations, after the country’s Supreme Court ruled in December that periodic bonuses and other compensation must be included in workers’ base pay. An increase in labor costs would add pressure on Hyundai and Kia, which have struggled to boost earnings as a strengthening won erodes the value of profits from overseas.

“Chairman Chung Mong-koo should immediately acknowledge bonuses as regular wages,” Lee said. “We’ve heard of the difficult economic situation and of the unfavorable foreign exchange rates, which means that if the company and the union don’t get along we could all perish together.”

Hyundai reported second-quarter net income declined 6.5 percent from a year earlier to 2.24 trillion won ($2.18 billion). Kia posted a 13 percent slump in profit to 1.02 trillion won.

Adding to the pressure is the decision made by GM Korea and Ssangyong Motor to agree with their respective unions to include some bonuses in base pay.

Bloomberg




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