Hankook may have first strike in its entire historyThe union at Hankook Tire, Korea’s No. 1 tire producer, is calling the first strike in the company’s history.
Some 4,430 out of a total of 4,700 union members cast ballots over three days from Aug. 21 to Aug. 23, and 86.3 percent voted to strike over a salary hike offered by management.
The management has proposed an annual rise of 1 percent, while the union demands 6.7 percent plus improved welfare benefits.
The strike will not take place immediately, however, because there will be more negotiations with management. Labor and management requested Aug. 10 that the National Labor Relations Commission mediate the dispute. Technically, the strike could begin today at the earliest, given the mediation period is 15 days.
Shares of Hankook Tire slumped 4.3 percent to end at 35,650 won ($30) on Monday on concerns over a looming production glitch.
Should the top tire maker see the first strike in company history, it will follow in the footsteps of the second-largest player, Kumho Tire, which has been on indefinite strike since Aug. 17. It is Kumho’s first strike in three years.
Kumho’s walkout came after management proposed the company introduce the so-called peak wage system, in which salaries of employees are gradually slashed in the years leading up to their retirements. The management explained that it was also extending the retirement age, but the union refused to accept the offer. It is demanding that the company withdraw the plan and pay lump-sum bonuses proportional to the company’s performance last year.
It has not been so long since operations at Kumho Tire were normalized. The company graduated from a debt workout program late last year that began in December 2009, when its mother conglomerate, Kumho Asiana Group, suffered a liquidity crunch in the aftermath of buying Daewoo Engineering and Construction.
The strikes at export-reliant tire producers are seen as a blow to the Korean tire industry, which is already being challenged by lower-cost Chinese competitors.
“We lose 5.2 billion won per day from the strike,” said a spokesman with Kumho. “Should the strike continue, production volume for exports will inevitably shrink.”
Kumho Tire saw its second-quarter operating profit tumble 51.1 percent year on year to 55.3 billion won.
BY SEO JI-EUN [firstname.lastname@example.org]
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