Car Industry Labor and Management Agree on Extending Collective Bargaining Cycle to 2-3 Years Amid Crisis

Korea Automobile Manufacturers Association and Korea Institute for Industrial Economics and Trade Survey of 637 Employees from 130 Companies
On Appropriate Frequency of Labor-Management Negotiations, 'Should Be Extended to Over 2 Years' Response Rates: Management (81.4%), Production Technology Staff (77.8%), General Administration Staff (60%)

[Asia Economy Reporter Kim Hyewon] It has been revealed that domestic completed car labor and management have reached a consensus on extending the wage and collective bargaining agreement (wage and collective agreement, 임단협) negotiation cycle to 2-3 years or more. An unprecedented survey showed that 8 out of 10 production workers and executives from completed car companies, including Hyundai Kia Motors, consider a minimum of 2 years as an appropriate negotiation cycle.

On the 28th, the Korea Automobile Manufacturers Association and the Korea Institute for Industrial Economics and Trade conducted an online and offline survey targeting 637 people from 130 companies, including five completed car manufacturers and auto parts companies. When asked about the appropriateness of the wage and collective agreement negotiation cycle, the response rate for extending it to 2 years or more was 81.4% among executives, 77.8% among production and technical workers, and 60% among general administrative workers. The majority of workers on the production line, as well as executives, believed that negotiating every 2-3 years or more is more appropriate than the current practice of repeating wage and collective agreements annually. This is a somewhat surprising result.

An anonymous official from a completed car labor union said, "Many people feel fatigued by the habitual annual negotiations and strikes, but remain silent," adding, "We hope to extend the wage and collective agreement cycle like in foreign countries, so that during that period, we can focus on improving productivity and have a clear system for performance and compensation." This reflects the current atmosphere.

The automotive industry plans to conduct joint investigations with the labor sector and actively promote extending the wage and collective agreement negotiation cycle beyond the current period. The Metal Workers' Union of the Korean Confederation of Trade Unions (KCTU) has reportedly shown a progressive stance, stating that stable labor-management negotiations and the establishment of a framework for social consensus must precede efforts to improve labor productivity in the automotive industry. For this, amendments to the Labor Union and Labor Relations Adjustment Act (Labor Union Act) are also necessary. Article 32 of the Labor Union Act stipulates that collective agreements cannot have a validity period exceeding two years.

Jung Manki, chairman of the Korea Automobile Manufacturers Association, emphasized, "Germany, a strong automotive nation, does not legally enforce wage and collective agreements but leaves it to private autonomous agreements," adding, "To enhance labor productivity in the automotive sector, we must systematically collect workers' opinions more scientifically and empirically and promptly promote changing the wage and collective agreement negotiation cycle to 2-3 years or more." Chairman Jung also proposed an annual regular survey related to automotive industry productivity and stated that joint surveys with labor organizations would be desirable to improve reliability and validity.

Production and technical workers showed a strong perception that, compared to executives or general administrative workers, adjustments to production volume in response to market demand changes are not smooth. While production and technical workers cited consultations with labor unions as the background for difficulties in volume adjustment on the ground, executives pointed to unstable demand or rising costs, showing a clear difference in perspectives.

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