Most auto workers set to strike after vacations

It may be the calm before the storm for Korean automakers as their unionized workers are set to go on strike after returning from summer holidays.

With negotiations overs wages and working conditions failing to yield progress, labor unions at Hyundai Motor, Kia Motors and General Motors (GM) Korea are expected to call for their workers to walk off the job.

The timing couldn’t be worse. Korean automakers are struggling, and the country as a whole is facing challenges across the board.

Hyundai Motor’s labor union voted to strike for the eighth consecutive year last week after the 16 rounds of wage negotiations held since May 30 with management failed to produce an agreement. According to the union, 70.54 percent of its 50,293 unionized workers voted to strike.

The union has been demanding a raise of 123,526 won ($102) in base pay for all pay grades and asked the automaker to distribute to them 30 percent of the 1.65 trillion won of net profit made last year. The workers have also demanded management raise the retirement age from the current 60 to 64 or higher.

The National Labor Relations Commission (NLRC) decided a day later not to intervene, allowing the workers to walk out at any moment. But they chose not to take action until workers at Kia Motors make a move.

On the same day Hyundai Motor’s labor union voted to strike, 73.6 percent of 29,545 Kia Motors’ unionized workers also voted to do the same.

The workers at Kia Motors have been demanding the same as those at Hyundai Motor, in terms of the increase and the percentage of profits. But as no consensus was reached during the 10 rounds of negotiations kicked off on June 13, Kia Motors workers stopped the negotiations on July 23 and requested the NLRC to mediate.

Once the central labor commission rules to not intervene, as with Hyundai Motor’s union members, and once unionized workers return from their summer vacation, the union members at Korea’s automakers are expected to stage coordinated strikes.

Workers at Hyundai Motor and Kia Motors are currently on their summer vacation, which began Monday. Their vacation lasts until the end of Friday, and workers are scheduled to come back to work on Monday.

The problems don’t end there. GM Korea’s labor union already declared it would stop wage negotiations for this year on July 24 and submitted a mediation request to the NLRC a day later. The unionized workers demanded a 5.65 percent raise in base pay and 250 percent of their regular monthly wages as a bonus, but management refused.

The Korean unit of the U.S. automaker recorded 4.4 trillion won in operating losses over the past five years.

Renault Samsung Motors (RSM) started negotiations late last month but is facing difficulties closing the gap between management and the union’s demands.

The government is doing its best to discourage the strikes.

Prime Minister Lee Nak-yon urged the labor unions of Hyundai Motor, Kia Motors and GM Korea in a meeting Tuesday to reconsider going on strike, citing Korea’s difficult economic situation.

“Labor unions should consider the current difficulties and refrain from striking,” Lee said. “Companies should fully engage in negotiations to find solutions.”

If workers of Hyundai Motor and Kia Motors walk out, car sales could take a hit.

Hyundai Motor would face challenges in producing its popular Palisade SUV and all-new Sonata, while Kia Motors would have a hard time recovering car sales, as was hoped would happen with the introduction of the new Seltos in the third quarter.

GM Korea and RSM are already facing difficulties in the Korean market.

GM Korea sold 36,451 vehicles in June, down 22 percent from a year earlier due to weak demand for the Impala sedan and the Equinox SUV. RSM’s sales dropped 25 percent to 11,112 units during the same period.

BY KO JUN-TAE [ko.juntae@joongang.co.kr]