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[Asia Economy Reporter Kiho Sung] The Korea Tire Branch of the Korean Metal Workers' Union, affiliated with the Korean Confederation of Trade Unions, is launching a protest in Seoul related to this year's wage negotiations. This is an escalation following the guerrilla strikes that began in July. Industry insiders express concern that if the strike intensity increases, the company may resort to the drastic measure of a 'partial workplace closure.'

On the 8th, a representative from the Korea Tire branch stated, "We are planning a protest in Seoul tomorrow," adding, "We will raise the level of the strike starting with the Seoul protest."

From this year, Korea Tire has shifted to a dual union system with the branch and the Korea Tire & Technology Labor Union of the Rubber Industry Federation, affiliated with the Federation of Korean Trade Unions. Initially, the union acted as the representative union, but this year the branch has become the primary union.

The union has already held a signing ceremony for a wage negotiation agreement in September, which includes a 5.0% base salary increase. Both labor and management agreed on a 5.0% base salary increase (including step increments) and a production incentive of 1 million KRW, with 60.1% of union members approving the agreement.

However, the branch is still continuing negotiations. It is known that the branch is demanding an additional 0.6% base salary increase and a one-time payment of 2 million KRW on top of the union's agreement. A branch official criticized, "The total amount of the base salary increase currently demanded is less than Chairman Cho Hyun-bum's annual salary," adding, "The company has not presented any additional proposals for negotiation."

However, the company maintains that it cannot accept these demands. If the branch secures a better agreement than the union, it is expected that the union's opposition will be strong.

Industry insiders note that since the union has been suffering damage from irregular guerrilla strikes at the Daejeon and Geumsan factories since July, in the worst case, the company may implement a partial workplace closure excluding branch members from work.

A workplace closure is a system where the employer refuses to accept labor services from workers in response to labor disputes and is exempt from paying wages. The tire industry has already experienced workplace closures. Kumho Tire underwent three workplace closures, including total and partial strikes, from entering workout in 2009 until its graduation in December 2014. Korea Tire also conducted a 19-day shutdown with the nature of a workplace closure last year due to union strikes.

Korea Tire has already been negatively affected in profitability at its domestic factories due to union strikes in the third quarter. In a recent earnings conference call, Korea Tire stated, "Due to the guerrilla strikes by the Korean Metal Workers' Union Korea Tire Branch, affiliated with the Korean Confederation of Trade Unions, ongoing since July, the operating profit margin for the third quarter is at 0%."

Jinwoo Kim, a researcher at Korea Investment & Securities, pointed out, "Korea Tire has many mid- to long-term growth drivers such as competitiveness in electric vehicle tires, expansion of the Tennessee plant, and increased supply of tires for Hyundai Motor's new vehicles (OE), but in the short term, it is necessary to monitor the strike trends and whether negotiations are settled."

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