Hyundai Motor Reaches No-Strike Entry Agreement... Auto Industry on High Alert for Strikes

Hyundai Motor Successfully Negotiates Without Strikes for 3 Consecutive Years
Korea GM Rejects Tentative Agreement
Kia, Renault Samsung Still Face Labor-Management Conflicts

The Hyundai Motor Union is counting the votes of union members for the tentative agreement on this year's wage and collective bargaining at the union office of the Ulsan plant on the 28th.
[Image source=Yonhap News]

[Asia Economy Reporter Changhwan Lee] Hyundai Motor Company's labor and management have successfully negotiated wages and collective agreements for the third consecutive year without any strikes. However, other automakers such as Kia, Korea GM (GM Korea), and Renault Samsung Motors are still in the midst of wage and collective bargaining negotiations, keeping the industry on edge about potential strikes.

According to the automotive industry on the 28th, Hyundai Motor's labor union conducted a vote among all 48,534 union members on the tentative agreement for this year's wage and collective bargaining. The result showed 42,745 participants (voter turnout 88.07%), with 24,091 (56.36%) in favor, passing the agreement.

Hyundai Motor's labor and management concluded negotiations 63 days after the initial meeting on May 26, marking the third consecutive year of reaching an agreement without strikes. This three-year streak of peaceful settlements is the second in history, following the period from 2009 to 2011.

In 2019, the parties avoided strikes due to the impact of the Korea-Japan trade dispute, and last year, concerns over the COVID-19 pandemic led to a strike-free conclusion of negotiations.

The tentative agreement includes a monthly base pay increase of 75,000 KRW (including step increments), a performance bonus of 200% plus 3.5 million KRW, a quality improvement and accident prevention incentive of 2.3 million KRW, and a special agreement for future competitiveness securing 5 shares of stock. The signing ceremony is scheduled to take place on the 29th at the Ulsan plant headquarters.

Following Hyundai Motor's successful wage and collective bargaining, messages of appreciation were also expressed. Prime Minister Kim Boo-kyum stated on social networking services (SNS) that "I would like to thank both labor and management of Hyundai Motor for choosing coexistence over conflict during these difficult times."

Ulsan Mayor Song Cheol-ho also issued a statement on the 28th, saying, "In a time when the local economy is more difficult than ever due to the prolonged COVID-19 pandemic, this is like a timely rain for Ulsan."

Except for Hyundai Motor, Wage and Collective Bargaining Success Still Pending, Creating High Tension

Although Hyundai Motor, the industry's leading company, succeeded in wage and collective bargaining without major conflicts, tension over potential strikes remains high in the automotive industry. Labor-management conflicts persist in other automakers besides Hyundai Motor.

The Korea GM union held a vote among union members from the 26th to the 27th on the tentative wage negotiation agreement, with a majority of 3,441 members (51.15%) voting against, resulting in the rejection of the agreement.

The rejected agreement included a 30,000 KRW increase in base pay including step increments and a one-time incentive payment of 4.5 million KRW. However, the base pay and incentive levels fell far short of the union's original demands, leading to strong opposition from union members.

With the wage negotiations returning to square one, Korea GM is unlikely to reach an agreement before the summer vacation. Korea GM faces the challenge of making up for production shortfalls caused by semiconductor supply shortages in the first half of the year during the second half, while also bearing the risk of strikes.

Kia is also moving toward strike preparations. The Kia union declared a breakdown in negotiations on the 20th and plans to conduct a strike authorization vote among all union members on the 10th of next month.

The situation at Renault Samsung is also challenging. Renault Samsung has yet to conclude last year's wage and collective bargaining and is still negotiating. Recently, at the 11th main negotiation session, the management proposed a groundbreaking one-time payment of 8 million KRW and is currently negotiating with the union.

This offer adds a 2 million KRW compensation for freezing base pay and a 1 million KRW incentive to the previous proposal of a 5 million KRW one-time payment. For Renault Samsung to finalize negotiations before the summer vacation, a tentative agreement must be reached within this week.

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