Genesis Production Line Also Stops... Hyundai Motor Labor and Management Agree on '70% Wage' for Temporary Shutdown

Hyundai Motor Union Agrees to Pay 70% Wages During Work Suspension on Morning of 4th

Hyundai Kia Motors Yangjae Headquarters

[Asia Economy Reporter Kim Ji-hee] On the 4th, Hyundai Motor's Genesis production line came to a halt as the supply of Chinese-made parts was cut off due to the novel coronavirus (COVID-19) outbreak. Until the afternoon of the 3rd, Hyundai Motor's labor union insisted that the company was responsible for the factory shutdown and demanded 100% payment of regular wages during the suspension period. However, on the morning of the 4th, the union unexpectedly accepted the company's proposal to pay 70%.

According to Hyundai Motor, from the morning of the 4th, production on one of the two lines at Ulsan Plant 5 was stopped. The halted line produces three models of the premium brand Genesis: G90, G80, and G70. Meanwhile, hydrogen fuel cell vehicles (FCEVs) such as Nexo and Tucson, assembled on the adjacent line, continue to be produced normally. Among the Genesis models, the sport utility vehicle (SUV) GV80, released this year, still has parts in stock and is currently being produced at Ulsan Plant 2.

Before the shutdown, Hyundai Motor's labor and management held the second and third rounds of practical negotiations related to COVID-19 from 1:30 p.m. the previous day at the Ulsan plant but failed to reach an agreement. Both sides agreed on the necessity of a shutdown due to the supply limit of Chinese-made 'wiring harness' parts, but differed on details such as the shutdown period per plant and wage payments. The union held an internal executive committee meeting on the morning of the 4th and unexpectedly accepted the company's proposal.

In the previous day's negotiations, the union insisted that all plants should shut down simultaneously and demanded 100% payment of regular wages during the suspension period. However, it was reported that the union expressed willingness to forgo some allowances if full wages were paid during the shutdown. The union claimed that the current parts shortage was clearly the company's fault, as the company diverted parts shipments overseas.

On the other hand, the company stated that uniform leave and 100% payment of regular wages were not possible. Considering parts inventory and other conditions, the company proposed different shutdown periods for each plant and payment of 70% of average wages. According to Hyundai Motor's collective bargaining agreement, in cases of shutdown due to reasons such as 'power outage, water outage,' 'shortage of raw materials and supplies, machine maintenance and inspection,' or 'other company faults,' the company must pay 70% of average wages. Even if 100% of regular wages are paid by mutual agreement, bonuses and allowances should not be affected.

Earlier, SsangYong Motor, which also halted operations at its Pyeongtaek plant from the 4th to the 12th due to the same parts supply issue, decided to pay 70% of average wages during the suspension period. Like Hyundai Motor, the collective agreement stipulates 70% payment if the company is at fault. Since this case is considered a disaster, it was difficult to determine fault, so the decision was made accordingly.

Hyundai Motor's domestic plants were facing a bigger crisis starting around the 5th, when parts inventory would be depleted. On the morning of the 4th, inventory at Ulsan Plant 4 Line 2 ran out, and Ulsan Plant 1 had only secured enough parts to continue production until that day. From the 5th to 6th, the truck line at Jeonju Plant and Line 2 at Ulsan Plant 5 were also scheduled to stop one after another. Except for the three lines at Ulsan Plant, the resumption dates for other lines remain undecided.

This content was produced with the assistance of AI translation services.