Automobile Industry Faces Another Strike Crisis This Week

[Asia Economy Reporter Changhwan Lee] As wage and collective bargaining negotiations in the domestic completed car industry, which were suspended due to summer vacations, are set to intensify this week, the industry is expected to face another critical point for strikes.

According to the industry on the 22nd, the Korean GM (GM) union will hold a vote among its members on the 23rd and 24th regarding the approval or disapproval of the second tentative labor-management agreement on wage negotiations.

The second tentative agreement maintains the existing terms, including a monthly base salary increase of 30,000 KRW and a lump sum payment of 4.5 million KRW, but adds that 4 million KRW of the lump sum will be paid immediately upon agreement and includes the provision of maintenance coupons worth approximately 300,000 KRW per employee for company brand vehicles.

If the agreement is approved by a majority vote of the union members, negotiations are expected to be completed within this month. If it is rejected again, prolonged negotiations are inevitable.

Kia and Renault Samsung Motors have yet to finalize an agreement. The Kia union is scheduled to hold a dispute countermeasure committee meeting on the 23rd to discuss further negotiations and the possibility of initiating a strike.

The management has proposed to the union a base salary increase of 75,000 KRW (including regular seniority increments), a performance bonus of 200% plus 3.5 million KRW, a special quality improvement incentive of 2.3 million KRW, and 13 shares of stock if the agreement is reached without dispute.

On the other hand, the Kia union is demanding a monthly base salary increase of 99,000 KRW (excluding seniority increments), a performance bonus amounting to 30% of last year's operating profit, extension of retirement age (up to 65 years old), and a reduction of working hours to 35 hours per week.

If the Kia union goes on strike again this year, it will mark the 10th consecutive year of strikes.

Renault Samsung Motors, the only completed car manufacturer that did not conclude last year's wage and collective bargaining negotiations, is expected to accelerate negotiations starting this week.

Previously, management proposed integrated negotiations for the 2020 and 2021 wage and collective bargaining, including a base salary freeze compensation of 2 million KRW and a productivity incentive averaging 2 million KRW per person, totaling 8 million KRW in lump sum payments. However, the union demanded a base salary increase of 71,687 KRW and an incentive payment of 7 million KRW, leading to a failure to reach a tentative agreement before the summer vacation.

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