Hyundai Motor union holds full-scale strike

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Hyundai Motor union holds full-scale strike

Hyundai Motor’s labor union launched a full-fledged strike on Monday for the first time in 12 years, a move that is expected to deliver a significant blow to the already bruised domestic automotive industry.

Amid a delayed wage negotiation that began in July, the labor union conducted a full walkout on Monday, putting a daylong halt to the assembly lines of Hyundai Motor’s three domestic plants in Ulsan, Jeonju and Asan, and disrupting the production of some 7,000 vehicles worth 160 billion won ($144 million). The strike will continue for the rest of the week on a two-shift basis for six hours a day.

“We tried to put an end to the wage negotiation through previous partial strikes,” said the union spokesman, “but the company didn’t show any willingness to listen to employee’s requests.”

The spokesman added that the 26th negotiation session, held on Sept. 23, during which the company refused to consider any more wage raises, pushed the union to consider a more extreme, large -scale walkout.

The full walkout also affected the auto parts affiliate Hyundai Mobis.

“It’s hard to calculate the exact amount,” said a Hyundai Mobis spokesperson, “but since our factories are linked to those of Hyundai Motor’s in real-time, the module-making process at Hyundai Mobis factories in Ulsan and Asan had to stop as a result of the carmaker’s full-face walkout.”

The government, consequently, showed concern over the export business of domestically manufactured vehicles, which have been already faced a significant downturn this year.

“If the walkout planned by the end of this month rolls out as scheduled,” said Joo Hyung-hwan, Minister of Trade, Industry and Energy on Monday evening through a statement, “it is going to cost $1.3 billion in lost production of some 98,000 units of cars.”

Joo added, “Korea’s export business has been dire recently due to the sluggish global economy. Hyundai Motor labor union’s walkout is going to intensify such hardships.”

According to Korea Automobiles Manufacturers Association, Korea used to be the world’s fifth largest car manufacturer but was pushed down to sixth place by India, based on the accumulated number of cars made between January and July. It is now on the verge of being pushed down to seventh place by Mexico.

“Groundless walkouts should be called off as soon as possible so that manufacturing line can operate normally,” Joo said.

Hyundai Motor’s labor union has already rolled out 19 partial walkouts this year, which reportedly resulted in more than 2 trillion won worth of losses. The two sides mainly clashed over the increase rates of the employees’ wages and expansion of the wage peak system, which currently freezes the wage of 59-year-old workers and cuts the wage of 60-year-old workers by 10 percent.

A tentative deal was reached last month at the 21st negotiation session, where the managerial level of both sides agreed to raise the workers’ monthly wage by 58,000 won, a smaller amount compared to last year’s 85,000 won. At the time, the company said the smaller raise was based on the sluggish performance by the company this year, which recorded a 7-percent year-on-year dip in operating profits in the first half. Instead, the company had withdrawn its initial proposal to extend its 10-percent-wage-cut system to 59-year-old workers.

But the agreement was rejected by 78 percent of opposition votes by the labor union, which comprises some 49,000 employees, who say the wage raise was too small compared to their initial proposal of 150,000 won.

“The continuous walkouts have severely jeopardized the possibility of Hyundai Motor reaching this year’s goal,” said Hyundai Motor President Yoon Gap-han. “We are currently having a hard time restoring the damage from recent outbreaks of earthquakes.”

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