Deal reached at Hyundai Motor after five months

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Deal reached at Hyundai Motor after five months

Ending a marathon five-month negotiation over raises, Hyundai Motor and its labor union came to an agreement Friday evening, with 63 percent of some 5,000 union members voting in favor of the tentative deal.

The deal includes a 72,000 won ($63.60) raise in laborers’ basic monthly salaries in addition to a 3.3 million won lump sum bonus and an incentive payment equivalent to 350 percent of monthly salary. Each worker will also receive 500,000 won in gift certificates for use at traditional markets and 10 Hyundai Motor shares.

“We will take this year’s negotiation process as a stepping stone in establishing a healthier company-labor union relationship,” said a Hyundai Motor spokesman.

“We will focus on quality management from now on to fortify the company’s competitiveness.”

Hyundai Motor’s union is known to be one of the toughest, and prides itself on the fact that wage negotiation have been held nearly every year since the union was founded back in 1987, with the exception of four years.

During the 1990s, the union was a champion of workers’ rights as Korea came out of years of dictatorships that maintained an iron grip on labor.

This year, the union’s strikes cost the company its largest-ever production loss of 3.1 trillion won. The strikes disrupted the manufacture of 142,000 vehicles.

The union called for a full walkout last month for the first time in 12 years, after rejecting a tentative deal for a 58,000 won raise in monthly basic pay. The union initially proposed an 85,000 won raise.

Union leaders originally agreed to the 58,000-won raise in return for keeping the current peak wage system, which cuts wages by 10 percent for workers 60 or over. The company wanted to lower that age to 59.

But younger workers opposed to the idea, saying their monthly incomes were more important than incomes for people nearing retirement.

Continued disagreement between the union and the company led the government to warn of its right to launch emergency arbitration, which bans the union from walking out for 30 days.

Upon reaching agreement Friday, Hyundai Motor said it will focus on quality management and try to launch the Grandeur sedan in November.

Hyundai Motor, the world’s fifth largest automaker when combined with sister company Kia Motors, is planned to release its quarterly earnings on Oct. 27.

Local brokerage houses expect its Q3 operating profit to be 1.3 trillion won, which is a 31.8 percent year-on-year drop, largely because of “unprecedented production loss due to factory suspension.”

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