Hyundai Motor reaches tentative agreement with union, again dodging strike

Hyundai Motor employees work at its Ioniq 5 plant in Ulsan [HYUNDAI MOTOR]

Hyundai Motor and its union reached a tentative agreement, avoiding a labor strike for the fourth consecutive year.

The two parties agreed to a 98,000-won ($75) increase in basic monthly pay, the largest pay raise since 2013. The agreement was made during their 16th round of negotiations held in Ulsan on Tuesday.

The employees will be paid a bonus of 200 percent of their monthly salary plus 4 million won, as well as 20 Hyundai Motor shares per person.

The management also promised to construct its first electric vehicle (EV)-dedicated factory in Korea. It will be the first domestic automotive manufacturing plant to be built in 29 years.

The location and production capacity have not yet been decided, though Ulsan is in the running. Groundbreaking is scheduled for next year.

"The company is expected to make the largest investment in Korea," the company said in a release. "With the domestic EV-dedicated factory, we will be able to lead the global EV market."

The decision came as the company made an announcement to spend $5.5 billion in building an EV factory in Georgia in the United States in May.

The management, however, did not accept a few of the union's terms such as the extension of retirement age and rehires of discharged workers.

The union will vote on the agreement on July 19.

It took around two months to come to an agreement since the management and union held their first round of negotiations on May 10. There were no walkouts during the talks.

This was the four straight year that the union and management were able to come to a temporary agreement without walkouts.

The two sides pledged to cooperate to enhance the quality of the cars produced, which would eventually lead to stable employment. They agreed to hold meetings regularly to discuss the trend of future mobility.

Hyundai Motor’s union is infamous for militant actions. Since its foundation in 1987, the union staged either partial or full walkouts nearly every year to demand higher wages, except for in 2007 and from 2009-11.

In 2016, when the union staged its first full strike in 12 years, it lead to the disruption of at least 3 trillion won worth of production.

BY SARAH CHEA [chea.sarah@joongang.co.kr]