Hyundai Motor Union Demands "Build Electric Vehicle Factory in Korea"

Demand for Base Salary Increase and Allowance Realignment
Conflict Over 'Electric Vehicle Transition' Also a Flashpoint

Negotiation representatives of Hyundai Motor Group labor and management sitting face to face / Photo by Yonhap News

[Asia Economy Reporter Lim Ju-hyung] The Hyundai Motor Labor Union has declared the breakdown of this year's wage negotiation talks. The union demanded from management a basic wage increase, abolition of the wage peak system, and the establishment of a new factory related to the future car industry in South Korea. This move appears to be driven by concerns that the shift to electric vehicles by Hyundai will reduce the production share of internal combustion engine vehicles, thereby decreasing jobs for existing production workers. With both labor and management unable to narrow their differences, the union is expected to hold a strike vote among all members on the 1st of next month.

On the 22nd, the Hyundai Motor Union announced the breakdown of wage negotiations at the 12th negotiation session held at the Ulsan plant headquarters. The union explained the reason for declaring the breakdown as "management has not presented a comprehensive proposal regarding this year's wage negotiations and is only expecting concessions from workers."

In the first negotiation session the previous day, the union demanded from management ▲a basic wage increase of 165,200 KRW (excluding seniority increments) ▲a 30% performance bonus based on net profit ▲realistic adjustment of allowances. Separate demands included ▲new personnel recruitment ▲extension of retirement age ▲job security.

The union also demanded the effective abolition of the wage peak system. Hyundai had introduced the wage peak system when extending the retirement age from 58 to 60 years old, and the union announced through an internal newsletter on the 7th that "the wage peak system will be abolished through the 2022 collective bargaining."

◆Conflict over Hyundai's 'Electric Vehicle Transition' Also a Flashpoint... Demand for New Domestic Factory

Regarding Hyundai's future car industry, the demand for new domestic factory establishment and investment was also a major issue. The union's demand for new factory investment appears to be an effort to secure additional work for in-house production workers in preparation for the company's 'electric vehicle transition.' Generally, electric vehicles are known to have fewer parts and easier modularization compared to traditional internal combustion engine vehicles, resulting in less production labor burden.

Hyundai Motor Company's future electric vehicle concept car. Hyundai is pursuing a plan to increase the production of eco-friendly vehicles to approximately 1.87 million units by 2030 as part of its electric vehicle transition strategy. / Photo by Yonhap News

Additionally, Hyundai produces the 'Lambda' engine, a core part of internal combustion engine vehicles, at its Ulsan and Asan plants. If the proportion of internal combustion engine vehicles in Hyundai's total vehicle production decreases, the future of these two plants could become uncertain.

As a result, the Hyundai Motor Union has shown a skeptical response to management's electric vehicle strategy. Earlier, on the 20th of last month (local time), Hyundai officially announced an investment plan to establish a new electric vehicle plant worth approximately 6.3 trillion KRW in Georgia, USA. At that time, the union criticized in an internal newsletter, stating, "The collective agreement requires that when expanding overseas factories, an explanatory meeting be held with the union and matters affecting employment must go through the Employment Security Committee's resolution. This proposed establishment of the US plant violates the collective agreement," and added, "Hyundai plans to expand eco-friendly vehicle production to 1.87 million units by 2030, but there is no plan for maintaining union member employment or domestic factory investment in this process."

In response, management stated that due to unstable parts supply issues and various global risk factors, it is difficult to accept the union's demands. Hyundai said, "Given the difficult internal and external business environment and the need for thorough discussion, we deeply regret the union's declaration of breakdown at this time," and added, "We must conduct in-depth discussions to conclude negotiations and overcome the crisis."

Meanwhile, the Hyundai Motor Union plans to apply for mediation at the Central Labor Relations Commission on the 23rd and hold a special delegates' meeting on the 28th to decide the direction of industrial action. Subsequently, on the 1st of next month, a strike vote among all union members is expected to be conducted.

If the Central Labor Relations Commission determines that the gap between labor and management is significant and decides to suspend mediation, and if the strike proposal is approved in the union member vote, the union can proceed with a legal strike.

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