Even Amid COVID Surge... Car Union Demands "Wage Increase"

Renault Samsung Demands Over 4%
Three Major Automakers Declare Joint Struggle

[Asia Economy Reporter Kiho Sung] The automotive industry, which has been hit hard by the novel coronavirus disease (COVID-19), is experiencing heightened tension ahead of wage and collective bargaining negotiations. The Renault Samsung Motors union has demanded a wage increase of over 4% despite a shortage of work and accumulated deficits, while the three completed car manufacturers under the National Metal Workers' Union (KMWU) affiliated with the Korean Confederation of Trade Unions (KCTU) have declared they are willing to engage in joint struggles to ensure successful wage and collective bargaining, signaling anticipated difficulties.

According to the automotive industry on the 9th, while SsangYong Motor concluded this year's wage negotiations with a wage freeze, the wage and collective bargaining negotiations of the remaining four companies are gaining momentum. The first to move was Renault Samsung Motors. The company-specific union of Renault Samsung Motors has put forward demands ahead of the wage and collective bargaining, including a base salary increase of 71,687 KRW (4.69%) and a lump sum payment of 7 million KRW (5 million KRW as a COVID-19 recovery and XM3 successful launch incentive + 2 million KRW as a settlement incentive). They also demanded the provision of 1.2 billion KRW for union development funds, fuel cost support for workplaces without shuttle buses, reduction of labor intensity, abolition of the wage peak system, abolition of the performance evaluation system, increased vacation pay, and various expansions of welfare benefits. The Renault Samsung Motors union has taken a firm stance, stating that the base salary has been frozen for the past two years and that they are determined to achieve a raise this year.

The three unions of Hyundai Motor, Kia Motors, and Korea GM under the Metal Workers' Union are preparing to jointly engage in wage and collective bargaining. The three completed car manufacturers' unions recently held a 'Policy Planning Team Meeting' and decided on six joint government demands, including blocking the Gwangju-type job model in which Hyundai Motor participates as a shareholder, ▲demanding total employment guarantees ▲legislation for retirement age extension ▲demanding contributions to employment stability funds ▲strengthening tax and support measures for U-turn companies ▲legislation to reflect price increases in subcontracting (parts suppliers) unit prices ▲and demanding industry-wide collective bargaining.

At the same time, each company's wage and collective bargaining is also accelerating. Hyundai Motor's union is currently preparing its demands with the goal of kicking off negotiations by the end of next month, while Kia Motors' union plans to switch to a wage and collective bargaining system after its regular delegates' meeting on the 15th. Korea GM's union is gathering internal opinions to prepare demands by mid-month. The automotive industry expects that the wage increase proposals of the three completed car manufacturers, which are responding jointly, will align with the Metal Workers' Union's unified wage increase demand of about 6.51% compared to the base salary. Earlier, the Hyundai Heavy Industries union under the Metal Workers' Union, which started wage and collective bargaining, is also demanding an increase of 132,013 KRW (6.51% compared to the base salary), matching the unified demand level.

Alongside the wage and collective bargaining of completed car manufacturers, attention is also focused on wage negotiations with subcontractors. In the case of Hyundai Motor's union, they adopted a 'Ha-Hu-Sang-Bak Solidarity Wage' strategy last year. This wage negotiation strategy involves raising wages less for regular employees of large companies and more for subcontractors and non-regular workers. Senior Research Fellow Hanggu Lee of the Korea Institute for Industrial Economics and Trade pointed out, "Under the 'Ha-Hu-Sang-Bak Solidarity Wage' policy, even if wages at completed car manufacturers are frozen, subcontractor wages will inevitably rise," adding, "This could become a significant burden for subcontractors."

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