Strike ends at Hyundai Motor, but talks go on

Hyundai Motor’s labor union resumed producing Konas at the Ulsan plant late Tuesday, but the carmaker failed to expand production of the small sports-utility vehicle due to worker objections.

It has been trying to make more of the model in advance of its launch in the U.S. next year.

The nation’s No. 1 carmaker said Wednesday that it resumed production of the Kona after representatives at the factory called for renegotiations.

“Production has resumed but the negotiations will continue,” said a spokesperson for Hyundai Motor on Wednesday. “Any illegal action of the labor union, though, will be handled strictly.”

The union initiated a partial walkout at the Ulsan plant on Monday evening, claiming that the company tried to expand production of the Kona without notifying or discussing the matter with the union properly. The small SUV used to be manufactured on assembly line No. 11 and Hyundai wanted to expand it to assembly line No. 12, which was making Accent models.

The union, which is part of the hard-line umbrella union of Korean Metal Worker’s Union, said the company violated a collective bargaining agreement that includes an article stating the company has to notify the union at least 90 days before making a new car model or implementing new technology.

According to materials issued by the carmaker Wednesday, Hyundai Motor had decided to “temporarily mass-produce the Kona” after failing to come to an agreement with the union for the past 40 days. With the union’s dispute committee announcing a suspension of negotiations, Hyundai said it decided to expand production to assembly line No. 12 temporarily in order to meet demand for the Kona from domestic and overseas markets.

The Kona is Hyundai Motor’s first global small SUV, which launched in Korea in June and in Europe in August. The carmaker is pinning a lot of hopes on the model, including the hope that its success may compensate for declines in major markets like the U.S. and China.

It was scheduled to launch in the U.S. market in the first quarter of 2018 with exports starting in December. The carmaker said it plans to export 19,000 units of the Kona next year.

“We feel relieved that production was able to resume,” the printed material said. “[However] the company will apply the ‘no work, no wage’ principle to illegal walkouts,” it added.

The nearly two-day walkout reportedly disrupted production of some 1,230 vehicles, which translates to 17.4 billion won ($16.4 million) in losses.

“If the negotiations don’t proceed smoothly, the company has no choice but to start temporary mass-production again,” the handout said.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]