Hyundai Motor Union Finalizes Collective Bargaining Demands... Basic Salary Increase and Retirement Age Extension

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[Asia Economy Reporter Ki-min Lee] The Hyundai Motor labor union has finalized its wage and collective bargaining agreement (CBA) demands for this year. Amid massive investments anticipated due to securing automotive semiconductors and transitioning to future mobility, there are criticisms that the Hyundai Motor union has excessively demanded basic wage increases and performance bonuses.

According to industry sources on the 14th, the Hyundai Motor Branch of the Korean Metal Workers' Union under the Federation of Korean Trade Unions finalized its CBA demands, which include a basic wage increase of 99,000 KRW (excluding regular seniority increments), job security, and employment maintenance. The Hyundai Motor union is expected to notify management of the demands as early as today, with the initial meeting likely to be held in early June after management reviews the demands for two weeks.

The Hyundai Motor union plans to demand, through a separate collective bargaining proposal, a performance bonus payment of 30% of last year's net profit. Additionally, they insist on raising the gap between seniority steps in the wage table. Hyundai’s first seniority step is around 10,000 to 20,000 KRW, increasing by two steps annually. Increasing the gap between seniority steps results in higher increments per step, thereby raising the basic wage as well as overtime, holiday work allowances, and annual/monthly leave allowances.

The union also demands that management agree to future agreements related to industrial transformation. This is aimed at maintaining jobs as the industry transitions to eco-friendly vehicles such as electric and hydrogen cars.

Regarding improvements in treatment for research and general staff, the union plans to advocate for the abolition of the comprehensive wage system that pre-defines and uniformly pays overtime allowances, the introduction of a PC-OFF system that shuts down company computers after working hours, and the establishment of a student loan support program. Concerning sales staff treatment, the Hyundai Motor union’s sales committee has requested investments to strengthen base competitiveness and improvements to the progressive promotion system for sales positions.

Other demands include redevelopment of company housing areas (rental apartments, dormitories, etc.), construction of new aging service centers, rationalization work for painting facilities at the Jeonju plant, reinstatement of dismissed workers, integrated allowances, and resetting disciplinary records. Through amendments to the collective agreement, the union plans to request management to extend the retirement age to 64 years.

The Kia union also sent its CBA demands to management the day before, including a basic wage increase of 99,000 KRW, a 30% performance bonus based on operating profit, extension of the retirement age to 65, and prioritizing domestic factories for the development and production of next-generation vehicle models.

Within the industry, there are criticisms that the unions are making unreasonable demands amid a crisis situation following last year’s COVID-19 pandemic and this year’s semiconductor shortage, while investments are being made to secure future industrial competitiveness.

Hyundai Motor and Kia have decided to halt operations on some lines at Ulsan plants 3 and 5 and Sohwa plant 2 on June 17-18 due to semiconductor supply shortages such as airbag control units (ACU). Hyundai Motor has also decided to invest a total of 7.4 billion USD (approximately 8.1417 trillion KRW) to secure growth engines and strengthen competitiveness, including expanding electric vehicle production facilities in the United States, and investing in hydrogen, urban air mobility (UAM), robotics, and autonomous driving.

An industry official commented, "In a situation where an emergency has been declared due to the shortage of automotive semiconductors, large-scale investments are being made to secure future growth engines. The demands of the Hyundai Motor union are excessive."

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