Exports Barely Revived... Car Industry Faces Summer Struggle as Prices Surge

Hyundai Motor, Korea GM, and Others Hold Consecutive Strike Vote
Challenges Pile Up Including COVID-19 Bills, Retirement Age Extension, and Industrial Transition Agreement

[Image source=Yonhap News]

[Asia Economy Reporters Yu Je-hoon and Lee Ki-min] Labor unions in the domestic completed car industry have officially raised the banner of ‘struggle.’ Starting with the Korean GM union, Hyundai Motor’s union, the largest in the industry, will hold a strike authorization vote next week. The completed car industry, already struggling with parts shortages, is deeply concerned that if the unions proceed with a summer strike (hatu), production disruptions could worsen significantly.

According to the industry on the 2nd, the Korean GM union began absentee early voting yesterday and is currently conducting a strike authorization vote. Voting for the day shift will take place today and on the 5th, and after the counting, the union plans to file a labor dispute mediation request with the Central Labor Relations Commission. If mediation is suspended, the Korean GM union will gain legal strike rights. The Korean GM union is demanding a basic wage increase of 99,000 won (including seniority increments), a performance bonus at 150% of the ordinary wage, a 4 million won encouragement bonus, and development plans for the Bupyeong and Changwon plants. However, it is known that no significant agreement has been reached despite several rounds of labor-management negotiations. ▶Related article on page 3

Hyundai Motor is also facing a strike threat again after three years. After declaring a breakdown in negotiations at the 13th bargaining session on the 30th of last month and filing a mediation request with the Central Labor Relations Commission, the union plans to hold an extraordinary delegate meeting on the 5th and a general assembly of members on the 7th to conduct a strike authorization vote. Hyundai management proposed a wage agreement including a basic wage increase of 50,000 won (including seniority increments), a 100% performance bonus plus 3 million won, and a 2 million won quality improvement encouragement bonus, but the union rejected this and declared the negotiations broken. There has also been little progress on other major issues in this year’s wage negotiations, such as retirement age extension and industrial transition agreements.

Other completed car manufacturers are also stirring. The Renault Samsung union plans to hold an extraordinary delegate meeting on the 12th to reconsider joining the Korean Confederation of Trade Unions (KCTU). This is aimed at forming a unified front and joint response with the Korean Metal Workers’ Union, the upper-level union to which Hyundai, Kia, and Korean GM belong. Kia’s labor and management are also sharply divided over issues such as a 35-hour workweek and retirement age extension.

As the atmosphere for a summer strike heats up, the public relations battle between labor and management is also intensifying. The Hyundai Motor union issued a statement criticizing the “distortion of distributive justice,” while the office and research staff union, mainly composed of the MZ generation (born in the 1980s to 2000s), also pointed out that the situation is “unreasonable.” On the other hand, Hyundai Motor President Ha Eon-tae appealed to employees in a message, urging them to “coolly judge whether it is appropriate to compare cost structures with electronics and IT companies, which differ from manufacturing industries.”

Some critics argue that the retirement age extension, a core demand of the completed car unions, is a ‘vested interest protection’ that blocks job expansion for the younger generation. Jung Man-ki, president of the Korea Automobile Manufacturers Association, pointed out, “Global completed car manufacturers in Europe, the U.S., and elsewhere are conducting orderly restructuring with the goal of transitioning to electric and autonomous vehicles by the 2030s. If the retirement age is extended without considering this situation, the transition to future vehicles will inevitably be delayed.” He added, “Rather than suddenly demanding retirement age extension, it is time to conduct multifaceted reviews on how to solve job issues through social discussions and collective intelligence.”

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