Hyundai Motor Union Changes Amid 'Corona Crisis': "Wage Freeze Should Be Considered"

[Asia Economy Reporter Su-yeon Woo] The Hyundai Motor labor union, representing the metalworkers' union, has taken the lead in suggesting that wage freezes should be considered in response to the industry's crisis awareness caused by the novel coronavirus infection (COVID-19). This marks a stark contrast to the union's previously hardline stance, which insisted on wage increases as the top priority.

On the 17th, the Hyundai Motor union introduced the content of the crisis agreement reached between labor and management in the German metal industry through its newsletter. According to the report, the German metalworkers' union recently agreed to extend the wage agreement, which was set to expire at the end of March this year, until the end of this year.

In other words, considering the COVID-19 situation, the parties agreed to freeze wages this year in exchange for employers guaranteeing employment and the government compensating workers' wages. Companies will divide the annual special bonus into 12 monthly payments, and the German Federal Employment Agency will compensate 60-67% of lost wages if more than one-third of the workforce at a workplace experiences wage losses.

The Hyundai Motor union stated, "Although we do not have the infrastructure to do what Germany has done, labor, management, and government must come together to find survival measures under the overarching principle of 'protecting jobs' amid the COVID-19 crisis."

Hyundai Motor Ulsan Plant Overview / Photo by Yonhap News

On the same day, while introducing the case of the German metalworkers' union, the union also mentioned that the international credit rating agency Fitch recently downgraded Hyundai Motor's long-term issuer default rating (IDR) outlook to 'negative.' Additionally, they cited a recent report published by the International Labour Organization (ILO), highlighting the crisis across industries caused by COVID-19.

The fact that Hyundai Motor's union, known as a symbol of a strong labor union, was the first to mention a wage freeze indicates a change in the union's atmosphere compared to before. The new executive team of the Hyundai Motor union has been evaluated as moderate and pragmatic since its launch earlier this year.

As a global economic recession is expected due to COVID-19, global automobile companies are accelerating workforce restructuring. Reflecting this situation, the Hyundai Motor union appears to be placing emphasis on employment stability rather than wage increases. The Hyundai Motor union emphasized, "In the face of an unprecedented employment crisis caused by the COVID-19 situation, it is time to seek win-win cooperation to protect jobs."

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