Retirement Age Extension Tug-of-War... Hyundai Motor Faces Last-Minute Struggles Amid Strike Threat (Comprehensive)

Strike Turning Point Hyundai Motor, Negotiations Resume Today

[Asia Economy Reporter Changhwan Lee] Hyundai Motor Company labor and management, facing a strike crisis, have effectively entered the final round of wage and collective bargaining negotiations. Earlier, the Hyundai Motor labor union stated that if an agreement was not reached by the 20th, they would initiate a strike.

According to the automotive industry, Hyundai Motor labor and management have been conducting the 17th round of negotiations since this morning at the main building of the Ulsan plant. The negotiations are expected to continue until late afternoon.

Hyundai Motor labor and management held 16 rounds of wage and collective bargaining negotiations this year until last week but failed to reach an agreement.

At the 16th negotiation held on the 16th, Hyundai Motor management presented the union with a second proposal including a monthly base wage increase of 59,000 KRW, performance bonus of 125% + 3.5 million KRW, 5 free shares, a quality improvement incentive of 2 million KRW, and 100,000 welfare points.

This amounted to 14.13 million KRW, which is 2.99 million KRW more than the first proposal on a total amount basis, but the union rejected it.

The union's rejection was due to the base wage increase of 99,000 KRW and performance bonus payments not meeting their demands of 30% of net profit, as well as management's firm stance that extending the retirement age was difficult.

It is understood that management will present a third proposal to the union today. The third proposal is expected to include higher wages and performance bonuses than the second proposal, along with additional welfare benefits.

However, the contentious issue of retirement age extension is still viewed negatively by management. Hyundai Motor holds the position that extending the retirement age is difficult to accept due to serious youth employment issues in society and significant perception gaps among employees.

As an alternative, management has proposed expanding some senior contract positions and a continued employment system after senior contract termination, but the union considers this insufficient.

The future agreement, focusing on expanding domestic production of electric and hydrogen vehicles, also remains a major point of contention between labor and management. The union argues that new industry investments should be expanded in domestic plants to secure employment stability for union members, while management insists that overseas investment is essential to strengthen the company's competitiveness.

Hyundai Motor labor and management aim to reach a wage and collective bargaining agreement before the summer vacation, making this week a critical turning point for an agreement. Both sides have left open the possibility of additional negotiations beyond today's talks, but if the gap between labor and management is not bridged and final negotiations collapse, a strike is possible. If the Hyundai Motor union strikes this year, it will be the first in three years since 2018.

As negotiations have prolonged, Hyundai Motor's Ulsan plant has not yet scheduled weekend overtime work this week, raising concerns about production disruptions.

Industry insiders estimate that if final negotiations fail and the Hyundai Motor union actually goes on strike, the damage could reach several trillion KRW. The most significant damage from a Hyundai Motor strike occurred in 2016, when a 24-day strike caused production disruptions of 142,000 vehicles and losses amounting to 3.1 trillion KRW.

An industry official said, "I understand that there is still a significant gap between Hyundai Motor labor and management on some issues such as retirement age extension and increased investment in Korea," adding, "There is a possibility that today's negotiations may not yield the expected results."

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