Hyundai Motor's Three Consecutive Years of No-Strike Tentative Agreement 'Overcoming Strike Crisis'

Agreement Reached on Monthly Base Salary Increase of 75,000 Won, Performance Bonus 200% + 3.5 Million Won, etc.

Hyundai Motor Company labor and management (file photo) [Image source=Yonhap News]

[Asia Economy Reporter Changhwan Lee] Hyundai Motor Company and its labor union, which were on the brink of a strike over this year's wage and collective bargaining negotiations, have succeeded in reaching a tentative agreement.

If the agreement is approved in the union members' vote next week, Hyundai Motor will achieve a strike-free record for three consecutive years for the second time in its history. As the automotive industry continues to face crises such as COVID-19 and the shortage of vehicle semiconductors, both labor and management are evaluated to have made concessions to overcome these challenges.

According to the automotive industry on the 21st, Hyundai Motor and its labor union reached a tentative agreement during the wage and collective bargaining negotiations held yesterday at the Ulsan plant headquarters.

Hyundai Motor and its labor union had conducted 16 rounds of negotiations for this year's wage and collective bargaining until last week but failed to reach an agreement. Consequently, the union escalated the situation by announcing a strike starting this week.

However, the strike crisis was averted when the union accepted the company's third proposal during yesterday's negotiations.

The third proposal included a monthly basic wage increase of 75,000 KRW, a performance bonus of 200% plus 3.5 million KRW, a quality improvement and accident prevention incentive of 2.3 million KRW, a special agreement for future competitiveness securing 5 shares of stock, 200,000 points for the two-shift continuous weekday system, and 100,000 KRW worth of traditional market gift certificates to revitalize the local economy, which has been stagnant due to the prolonged COVID-19 situation.

Previously, the company had proposed in the 16th negotiation held on the 16th a monthly basic wage increase of 59,000 KRW, a performance bonus of 125% plus 3.5 million KRW, 5 free shares, a quality improvement incentive of 2 million KRW, and 100,000 welfare points.

Special Agreement to Expand Domestic Investment in New Industries

In this negotiation, labor and management also signed a 'Special Future Agreement on Industrial Transition Response' focusing on preparing for the future such as new industries centered on domestic plants and research centers and maintaining employment.

According to the agreement, Hyundai Motor plans to execute facility investments and prioritize mass production at domestic plants for major new businesses such as PBV (Purpose Built Vehicles) and UAM (Urban Air Mobility), provided that market conditions, various regulations, production methods, and business feasibility are met.

They also agreed on securing the future competitiveness of the automotive industry through mutual growth support for parts suppliers.

The company will continue to operate financial support programs such as a mutual growth special guarantee fund, to which it contributed 120 billion KRW to alleviate management difficulties of parts suppliers, a co-prosperity fund, and a future growth mutual fund with a contribution of 287.4 billion KRW to resolve liquidity crises of parts suppliers, as well as dedicated funds for second- and third-tier suppliers.

However, the tentative agreement did not accept the union's demands for extending retirement age or reinstating dismissed workers. The company plans to maintain the principle of not accepting demands that infringe on personnel and management rights.

With the successful negotiation, Hyundai Motor and its labor union have succeeded in producing a tentative agreement without a strike for three consecutive years. The union did not strike for two consecutive years due to the 2019 Japan-Korea trade dispute and last year's COVID-19 impact. This is the second time Hyundai Motor has achieved three consecutive years without a strike, following the period from 2009 to 2011.

However, this agreement is tentative and must be approved in the overall union members' vote scheduled for the 27th for Hyundai Motor's wage and collective bargaining for this year to be finalized.

A Hyundai Motor official stated, "At this time of great transformation in the automotive industry, we will focus our capabilities on overcoming the current crisis based on a cooperative labor-management relationship, and jointly enhance accident prevention and quality competitiveness to leap forward as a 'global top tier' in the future mobility era."

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