Hyundai workers start partial strikes over pay

Unionized workers and the management of Hyundai Motor failed to reach an agreement on this year’s wage negotiations before Chuseok, the Korean harvest festival.

According to the union of the nation’s leading automaker on Wednesday, morning shift workers went on a four-hour partial strike from 6:50 a.m. and afternoon shift workers went on a four-hour partial strike from 3:30 p.m. at the Ulsan plant in South Gyeongsang, Asan plant in South Chungcheong and Jeonju plant in North Jeolla.

This is the fourth consecutive year that Hyundai has seen strikes over the yearly negotiations. Since the process was established in 1987, the negotiations have wrapped up without a strike only four times.

The union announced it will call two six-hour strikes on Thursday at all three plants, one starting at 8:50 a.m. and the other at 5:30 p.m. The morning shift workers will go on another six-hour strike on Friday.

The union will hold a meeting on Oct. 1 to discuss specific plans for additional strikes.

Due to the three days of strikes this week, 8,000 to 10,000 cars will not be produced on time, which will cause about 200 billion won ($168 million) in losses, according to the company. Due to six partial strikes last year, the company wasn’t able to produce about 16,500 cars on time, which led to about 330 billion won in losses.

On Tuesday, the two sides held a 29th round of negotiations at the Ulsan plant with company president Yoon Gap-han and union head Lee Kyung-hoon at the table, but they could not bridge differences on core issues, including adopting the so-called peak wage system.

The company said it wants to implement the peak wage system this year, which extends the retirement age from 58 to 60 but also includes a reduction in worker’s salaries in their final years on the job. The union said the company should provide a measure that balances the salary cuts when workers enter the retirement age period.

Hyundai Motor proposed that when workers turn 59, they would get a 10 percent cut in their salaries, but the union rejected the offer. “The labor union needs to reconsider accepting the peak wage system that has been adopted nationwide recently to resolve the low employment problem for youth,” said Hyundai Motor president Yoon.

The peak wage system not only allows the retirement age to be raised but is also supposed to save companies money so they can hire more entry-level workers.

The union also demanded the company raise the base monthly pay by 159,900 won, a 7.84 percent rise from a year earlier, and said the retirement age should be extended to 65. The company said it could raise the monthly base pay by 81,000 won and give 3 million won plus 400 percent of monthly pay as a bonus, as well as giving 20 shares of the company to each employee on the condition of not going on strike, but the workers rejected those offers as well.

The breakdown in negotiations is raising concerns not only for Hyundai but also its sister company Kia Motors, which traditionally has followed the wage settlements made by Hyundai.

The union of Kia recently decided to go on strike if their demands are not met.

BY KWON SANG-SOO [kwon.sangsoo@joongang.co.kr]