Hyundai incurs more losses as strike rages on

Home > Business > Industry

print dictionary print

Hyundai incurs more losses as strike rages on

A strike at the country’s largest automaker, Hyundai Motor, continued into a fourth day on Friday after the company’s management and labor union failed to reach an agreement on salary increases and bonuses.

The union has been staging intermittent walkouts since last week after wage negotiations fell through. The two parties attempted talks again on Wednesday, with Hyundai proposing a monthly salary increase of 42,879 won ($37.50).

It also proposed setting this year’s bonus at three times the monthly salary plus 1 million won. The increases are smaller than last year, the company said, because its sales have been shrinking, especially in overseas markets.

But the union rejected the offer, saying the company made an “unreasonable proposal that failed to meet the expectations of members.” Workers initially requested the company raise their monthly salary by more than 150,000 won.

The strikes have significantly affected the automaker’s production volume, with an incurred loss of 300 billion won based on a production loss of 14,500 cars as of Thursday.

The number is expected to grow if the company can’t reach an agreement with its union, and workers have voted to continue their strike into Monday.

Last year, Hyundai suffered a more than 2 trillion won loss after the union walked off the line more than 20 times in a span of two months.

“I think the union feels pressured [by the heavy loss from last year],” a Hyundai spokesperson said. “The union and management all learned from last year, and we expect the feud will not be dragged on to the point of incurring a similar loss.”

Hyundai Motor’s sales fell in the first half of this year by nearly 10 percent from last year, and sales in China, one of its biggest markets, took an especially big hit of almost 50 percent.

“How the management and union settle the issue will play a crucial role if the Korean auto industry wants to recover from its losses in the first half,” said Kim Jung-ho, a director at the automobile and aerospace division of the Ministry of Trade, Industry and Energy.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)