Bad News Piles Up, Car Union Crosses the Line

Hyundai Motor Labor and Management Meet on the 26th, Start Full-Scale Wage and Collective Bargaining Talks

Hyundai Motor Company Ulsan Plant Photo by Yonhap News

[Asia Economy Reporter Changhwan Lee] The domestic automobile manufacturing industry has officially entered the summer labor dispute (hatu) season, starting with the introductory meeting between Hyundai Motor Company’s labor and management.

Despite various adversities such as COVID-19, the shortage of automotive semiconductors, and soaring raw material prices causing distress in the automotive industry, major automakers’ unions including Hyundai Motor’s are demanding wage increases and retirement age extensions from management based on expectations of economic recovery and improved performance, raising concerns already.

Unlike last year, when labor and management made concessions to reach a dispute-free agreement, there are concerns that this year’s hatu season will be more intense.

According to the automotive industry on the 25th, Hyundai Motor’s labor and management will begin formal collective bargaining for the 2021 wage negotiations starting with an introductory meeting on the 26th. Prior to the meeting, Hyundai Motor’s union prepared demands including a monthly base wage increase of 99,000 KRW, a performance bonus payment of 30% of last year’s net profit, and extending the current retirement age of 60 to 64.

On the same day at 11 a.m., Hyundai Motor’s union held a press conference at the Ulsan Hyundai Motor Cultural Center auditorium, urging the company to withdraw its recently announced investment plan in the United States, putting pressure on management. Hyundai Motor announced on the 13th that it would invest approximately 8.4 trillion KRW in the U.S. The union opposed this, stating that future vehicle investments should focus on domestic factories rather than overseas.

Management is reportedly reluctant to accept the union’s demands. The proposed wage increase is more than double the 40,000 KRW agreed upon in 2019, and the retirement age extension is considered unrealistic as electric vehicle production is expected to reduce workloads.

Investment in overseas plants is a separate matter from domestic plant investment and is seen as beneficial to the company in the mid-to-long term by expanding local market share and reducing costs, but the union is criticized for being obstinate.

This atmosphere is similar among other automakers. The Korea GM union is demanding a base wage increase of 99,000 KRW and a performance bonus of 150% of the regular wage this year. However, Korea GM has been experiencing prolonged losses, making it unlikely that management will accept these demands.

Renault Samsung Motors has yet to conclude last year’s wage and labor negotiations, with conflicts intensifying due to union strikes and management’s workplace lockouts. Renault Samsung is also in a difficult position to meet the union’s wage increase demands due to large-scale losses.

Professor Hogun Lee of Daeduk University’s Department of Automotive Studies said, “This year, the automotive industry’s management situation is becoming increasingly uncertain due to various adversities such as semiconductors and COVID-19,” adding, “In this situation, unreasonable demands from unions could potentially worsen the company’s competitiveness.”

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