'Summer Vacation Wrap-Up' Auto Industry to Fully Enter Labor-Management Negotiations Next Week

Hyundai Kia Motors and Korea GM Labor-Management to Begin Full Negotiations Next Week
Union Prioritizes Wage Increase and Job Security
Challenges Expected Amid COVID-19 'Management Crisis'

The Korea GM Bupyeong plant, which stopped operations due to a full-scale strike by the Korea GM union last September (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] The domestic complete car industry is wrapping up summer vacations and will enter full-fledged 'Summer Battle (夏鬪) mode' starting next week. Amid the overall difficulties faced by the automobile industry due to the impact of the novel coronavirus disease (COVID-19) this year, labor unions of each company have presented demands including basic wage increases, making this year's wage and collective bargaining agreement (wage and collective agreement) negotiations expected to be challenging.

According to the industry on the 7th, the five domestic complete car manufacturers (Hyundai Motor Company, Kia Motors, Korea GM, Renault Samsung Motors, and Ssangyong Motor) will conclude their concentrated summer vacations on the 9th. Following this, from the 10th when employees return from vacation, full-scale labor-management wage and collective agreement negotiations are scheduled to begin.

Until last year, most automobile companies held wage and collective agreement kickoff meetings before summer vacations, but this year the schedule is delayed. Except for Ssangyong Motor, which reached an early agreement on the 2020 wage and collective agreement under an emergency management system, only Renault Samsung and Korea GM barely held labor-management kickoff meetings before the vacation. Even then, both sides only shared their respective demands, and no substantial negotiations took place. The Hyundai Motor and Kia Motors unions finalized their demands and submitted them to management just before the vacation.

First, Korea GM's labor and management will sit at the negotiation table earliest, around the 11th to 12th, right after the vacation. Previously, the Korea GM union finalized initial demands including a basic monthly wage increase of 120,304 KRW, ▲ payment of performance bonuses amounting to 400% of ordinary wages plus 6 million KRW ▲ a 500% increase in allowances for some assembly line workers. Management has expressed reluctance, stating that the proposal even includes measures that would roll back agreements made between labor and management for the company's normalization after the closure of the Gunsan plant in 2018.

Renault Samsung's labor and management, which held relatively early wage and collective agreement kickoff meetings on the 6th of last month, have also not made much progress. The union's demands include a basic wage increase of 71,687 KRW per month and a one-time payment of 7 million KRW as a COVID-19 recovery and XM3 launch incentive, which the management is unlikely to accept easily, according to industry views. As they need to secure export volumes of the XM3 based on stable labor relations and strengthening the competitiveness of the Busan plant, management's concerns are expected to deepen. Renault Samsung's labor and management plan to start full-scale negotiations around mid-month.

Hyundai Motor's labor and management also plan to hold a kickoff meeting around the 13th and begin full negotiations. The union's demands, finalized just before the vacation, include a basic monthly wage increase of 120,304 KRW (excluding step increases) and a request to distribute 30% of last year's net profit (approximately 950 billion KRW) to union members and in-house partner company employees. Above all, demands for maintaining domestic plant production volume and securing future employment through orders related to eco-friendly vehicles are included, suggesting fierce disputes between labor and management. The Hyundai Motor union plans to negotiate aiming for an agreement before Chuseok, despite delays in the wage and collective agreement schedule due to COVID-19.

An industry official said, "In this wage and collective agreement, each company is expected to emphasize the management difficulties caused by COVID-19," adding, "On the other hand, unions are expected to seek to resolve employment insecurity arising from the transition to future vehicles along with wage increases, making it difficult to find a consensus."

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