Hankook Tire Enters General Strike Following 'Failed Wage Negotiations'

Labor and Management Disagree on Wage Increase Rate
Compounded by Rising Shipping Freight and Raw Material Prices, Domestic and External Challenges

[Asia Economy Reporter Ki-min Lee] The labor-management conflict at Hankook Tire, which has been struggling with wage and collective bargaining negotiations, is escalating to its worst situation.

The two major labor unions of Hankook Tire, affiliated with the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU), held a general strike rally at 2 p.m. today and launched an indefinite general strike. Hankook Tire's labor and management have been negotiating since August, but the collective bargaining agreement broke down due to differences in wage increase rates.

The union side demands a 10.6% wage increase this year, citing that the wage increase rate over the past five years was 2-3%, and wages were frozen last year. On the other hand, the management proposed a 5% increase and a performance bonus of 5 million won.

As negotiations reached an impasse, the union began a two-hour partial strike at the Daejeon and Geumsan plants starting on the 16th, and from the 19th, conducted a partial strike for four hours before the end of each shift (three shifts).

If the general strike at the Daejeon and Geumsan plants of Hankook Tire prolongs, it is expected to negatively impact the fourth-quarter performance. The securities industry forecasted that before the partial strike, Hankook Tire's fourth-quarter sales would increase by 5.44% to 1.8629 trillion won, while operating profit would decrease by 15.22% to 192.8 billion won.

This is because cost increases are inevitable due to the continued rise in shipping freight and raw material prices. The Shanghai Containerized Freight Index (SCFI), an indicator of shipping freight, stood at 4555.21 as of the 19th, more than five times higher than 890.37 on April 3 of last year (Q2).

Also, the prices per ton of natural rubber, synthetic rubber, and carbon black raw materials were $1,107, $974, and $184 respectively in Q2 last year, but rose nearly twofold to $1,653, $1,988, and $421 respectively in Q2 this year. High price levels have been maintained in Q3 as well.

The Daejeon and Geumsan plants are major production bases accounting for 38.7% of Hankook Tire's total sales (based on last year), so both domestic and export sales are inevitably affected.

A Hankook Tire official said, "Although there are differences between labor and management, we are continuously striving to reach a smooth agreement."

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