Hyundai Motor avoids walkoutHyundai Motor and its labor union have reached a tentative agreement on this year’s wage deal, the automaker said Wednesday.
The tentative deal marks the first time in eight years that the two parties have moved this far in negotiations without the labor union striking.
The deal is subject to approval by union members. Voting will be held Monday.
Hyundai Motor and the labor union said they were able to reach a consensus faster considering the country’s political and economic uncertainties spurred by a trade spat between Korea and Japan as well as the U.S.-China trade war.
“The two parties agreed that we need to work together to increase productivity and product quality to overcome risks from the global economic slowdown, falling demand for cars and digital transformation in the industry,” Hyundai Motor said in statement.
Under the tentative agreement, the company decided to give a 40,000 won ($32.95) raise in the basic monthly salary and performance-based incentives of 150 percent of the basic monthly salary, 3 million won in cash and 200,000 won of traditional market gift certificates.
The company also agreed to give a cash bonus of between 2 million won and 6 million won, depending on working years, as well as 15 Hyundai Motor shares to each worker.
The union initially asked the company to raise the monthly base pay by 123,526 won for all pay grades and pay out 30 percent of the automaker’s net profit as bonuses but accepted the revised plan considering the economic situation.
While the labor union also asked the company to extend the retirement age from the current 60 to 64, Hyundai said in a statement Wednesday that it did not accept the request as it violates the human resources management rights of the company.
“By avoiding a walkout, Hyundai Motor will see operating profit gains worth between 383.8 billion won and 634.2 billion won,” said Kang Seong-jin, an analyst from KB Securities in a report Wednesday.
On the news, Hyundai Motor shares rose 2 percent to close at 127,500 won on the Kospi on Wednesday.
It is left to be seen whether the Hyundai Motor union decision will affect the ongoing wage negotiations with the labor unions of other local automakers including GM Korea and Renault Samsung Motors. SsangYong Motor is the only Korean automaker that has already closed this year’s wage deal.
BY KIM JEE-HEE [firstname.lastname@example.org]