Post-Chuseok Auto Industry Labor Negotiations... Is 'Chutoo' Starting in Earnest?

Kia Motors Labor Negotiations: Multiple Issues Including Retirement Age Extension and Future Employment
Expectations Rise Over Impact of Hyundai Motors' Early Settlement
Korea GM and Renault Samsung Still at Odds, Situation Uncertain

Kia Motors Gwangmyeong Sohari Plant./Gwangmyeong=Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Kim Ji-hee] As Hyundai Motor Company’s labor and management agreed to freeze wages for the first time in 11 years, concluding the wage and collective bargaining agreement (CBA) before the Chuseok holiday, attention is now focused on the negotiations of the remaining three automakers after the holiday. While forecasts that prolonged negotiations are inevitable are gaining traction, there is also hope that Hyundai Motor’s case could have a positive influence on the industry.

According to industry sources on the 4th, among domestic automakers, Kia Motors, Korea GM, and Renault Samsung Motors are still in the process of this year’s wage and collective bargaining negotiations. These unions have presented demands centered on basic wage increases amid the COVID-19 crisis, causing difficulties. Additionally, employment issues in preparation for the future car era have emerged as a new topic this year, leading to stalled negotiations.

Kia Motors, which held its 5th main negotiation session on the 24th of last month, will continue talks immediately after Chuseok. The Kia union has submitted demands including a monthly basic wage increase of 120,304 KRW and a performance bonus payment of 30% of the 2019 operating profit. Through separate demands, they are also insisting on establishing dedicated lines for electric and hydrogen vehicles and core parts within the factory. There are numerous employment-related issues such as retirement age extension and new hires.

Some expect a turnaround in the atmosphere after Chuseok, based on the fact that Kia’s wage negotiations have proceeded at a level similar to Hyundai’s. Following Hyundai Motor’s CBA settlement, the Kia union stated, “After the Chuseok holiday, we will do our best to narrow down issues such as completing real wages by resolving 30 minutes of overtime, extending the retirement age, constructing an electric vehicle PE parts factory on-site, and reinstating dismissed workers.” They urged, “If management wants to conclude negotiations, they should make bold decisions without worrying about peer companies.”

The situation for Korea GM and Renault Samsung is even bleaker. The Korea GM union, having failed to narrow differences in 16 negotiation sessions, is already moving toward a strike. On the 24th of last month, the Central Labor Relations Commission (CLRC) decided to suspend dispute mediation related to the CBA, making a legal strike possible. The suspension means that the gap between labor and management is too wide to propose a mediation plan. The union had already obtained strike consent from members with nearly 90% approval. The union plans to demand additional proposals from management and, if not met, will hold the 5th Central Dispute Countermeasure Committee meeting on the 14th.

The Korea GM union is demanding a monthly basic wage increase of 120,304 KRW and a performance bonus exceeding 20 million KRW. They are also requesting the allocation of new vehicles to the Bupyeong 2 plant, which produces the small SUV Trax and the mid-size sedan Malibu. However, management is resisting, emphasizing that the company has been in deficit for seven consecutive years.

In the case of Renault Samsung, the union leadership’s attempt to rejoin the Korean Confederation of Trade Unions (KCTU) was rejected by a member vote on the 11th of last month, causing the CBA negotiations to lose momentum this year. The union is demanding a monthly basic wage increase of 71,687 KRW and a lump-sum payment of around 7 million KRW. Recently, management decided to suspend operations at the Busan plant until the 18th of this month due to increased inventory caused by poor car sales, further worsening labor-management relations.

Moreover, the current union leadership’s term ends this month, and a new leadership must be elected. Once negotiations resume, there is a possibility that this year’s CBA will extend into the next year.

An industry official said, “This year’s wage and collective bargaining negotiations in the completed car industry have become more uncertain as various issues such as the COVID-19 crisis and future employment have emerged as key topics.”

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