Hyundai labor union to vote on wage dealThe management of Hyundai Motor and its labor union hammered out a second tentative wage agreement late Wednesday evening, and the ball is now in the workers’ court as they meet today to decide whether to accept or reject the offer from the nation’s top automaker.
The tentative agreement includes a base monthly salary increase of 72,000 won ($63.27), 3.3 million won in a one-time bonus and 350 percent of basic pay in performance bonuses. The first agreement, which was reached in August, included a salary increase of 58,000 won, but it was rejected by 78 percent of Hyundai Motor’s 5,000 union members.
At the beginning of wage negotiations in May, the labor union proposed an 85,000 won raise. Subsequent talks between workers and management repeatedly failed, leading the union to walk off production lines a record 24 times since July.
“Hyundai Motor and its labor union reached common ground that the prolonged strikes should not damage the company as well as the nation’s economy,” a Hyundai spokesperson said. “The company tried to generate the best solution possible, trying to comply with company principles.”
If the union rejects the deal, there is high possibility that the government will exercise its right to emergency arbitration, which would ban the labor union from walking off production lines for 30 days. The union said its counterparts at all Hyundai Motor affiliates would respond with a strike if the government intervenes.
Even if union members approve the deal, Hyundai Motor still has to grapple with an estimated 3 trillion won loss already generated from the record walkouts. The strikes have disrupted the production of some 142,000 vehicles, and the loss reported by 384 parts suppliers of Hyundai Motor has reached 1.4 trillion won, according to the Korea Auto Industries Coop. Association.
Hyundai Motor has been struggling from dwindling domestic demand and an unstable global economy, posting a 7 percent drop in operating profit during the first half of the year. The world’s fifth-largest automaker (when combined with sister company Kia Motors) has been eyeing a rebound with the launch of its large-size Grandeur IG sedan in November, one of few new cars scheduled for release in the latter half of the year.
Now, industry insiders speculate the launch might be delayed, considering the current state of preparations. The new Grandeur has completed pilot production at the company’s Namyang R&D Center in Hwaseong, Gyeonggi, but hasn’t proceeded with next steps because of continual on-and-off strikes at its Ulsan plants.
“Even under the premise that strikes terminate, we cannot be sure if we can launch the vehicle as scheduled in mid-November because the entire production line is currently very unstable,” one company insider said.
Generally, a carmaker needs more than a month to roll out marketing promotions prior to receiving preorders.
Hyundai Motor shares closed at 134,000 won on Thursday, down 1.83 percent from the previous trading day.
BY JIN EUN-SOO, LEE DONG-HYUN [email@example.com]