Hyundai Motor’s workers strike over base pay

Unionized workers from Hyundai Motor yesterday held a partial strike as wage negotiations with management stalled over an issue with base pay.

Management and the union began talks on June 13, but progress has not been made in regard to counting regular bonuses as part of base wages - a contentious issue as they are the foundation for calculating allowances such as overtime pay and pensions.

The labor union of the nation’s largest automaker, which has some 47,000 members, carried out a four-hour strike yesterday, with the first shift workers laying down their tools for two hours from 1:30 p.m. The second set of employees were set to stop working at 10:10 p.m. and refused overtime. Unionized workers will also reject weekend work today and tomorrow.

The union of Hyundai’s small affiliate, Kia Motors, also launched a four-hour strike yesterday.

Hyundai’s union decided to strike after 69.7 percent of its members voted in favor of action last week. The union has now launched industrial action for three years straight. In its 28-year history, strike-free years have only occurred in 2009, 2010 and 2011.

Hyundai estimates that the union’s current industrial action will result in losses of more than 110 billion won ($107 million), disrupting the production of some 5,000 vehicles. The company is concerned that the delivery of new vehicles will be delayed, causing inconveniences to customers.

“The union should know that this is an act that hurts companies and makes both parties victims,” said a Hyundai spokesman. “We will keep negotiating with the union to reach an agreement.”

The automaker’s subcontractors and suppliers are also concerned about the strike. Hyundai has some 400 first-tier vendors and more than 5,000 second and third-tier suppliers who are hoping that an agreement will be reached before the Chuseok holidays, when bonuses are typically given.

The union is also demanding an 8.16 percent raise in basic pay, or 159,614 won per month, extending the retirement age by two years to 60, allocating 30 percent of last year’s net profit for bonuses and reinstating fired workers. Hyundai has said it will decide on the issue after a court ruling on base pay is made in a case filed against it by its workers.

Among the five local automakers, only Ssangyong Motor and GM Korea have finalized wage negotiations with their unions. Both reached a deal after including regular bonuses as part of base pay.

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