"Since We Earned, Give More" vs "Let's Resolve Maturely"... Tense Labor-Management Standoff in Automakers

Hyundai Motor & Kia Achieve Record High Performance Last Year
Union Demands "Compensation," Management Expresses "Concerns for Second Half"

The labor and management of the finished car industry have intensified their tensions ahead of the summer wage negotiations. As major companies have posted strong performances, there is a widespread sentiment within and outside the labor unions hoping to be adequately rewarded for these achievements. On the other hand, the companies foresee a challenging business environment from the second half of this year onward. There are expectations that this year’s negotiations will differ from last year’s, which concluded without strikes despite external and internal adversities.

According to explanations from each company, the Hyundai Motor Labor Union (Metalworkers' Union Hyundai Motor Branch) recently finalized this year’s collective bargaining demands at a delegates’ meeting and will begin negotiations with the company starting with a preliminary meeting on the 13th of next month. They plan to request a base salary increase of 184,900 KRW and a performance bonus amounting to 30% of net profits. The base salary increase is a demand in line with the Metalworkers' Union guidelines.

Hyundai Motor Company CEO Lee Dong-seok (right) and union branch chief Ahn Hyun-ho shake hands at the wage negotiation signing ceremony held last year at Hyundai Motor's Ulsan plant.

Based on the company’s net profit last year (7.984 trillion KRW), the performance bonus would amount to an average of over 30 million KRW per person. Additionally, they intend to request raising the current retirement age from 60 to 64 and increasing the current bi-monthly bonus to 900% of the base salary. Kia plans to hold an extraordinary delegates’ meeting on the 7th of next month to finalize this year’s demands. Since Kia also posted record-high results last year alongside Hyundai Motor, similar demands are expected.

Korea GM is also expected to finalize a proposal at its delegates’ meeting on the 1st of next month, requesting a base salary increase of 184,900 KRW and a performance bonus of 18 million KRW. The base salary increase is nearly three times that of last year, and the performance bonus is more than double. The company returned to annual profitability last year after nine years of continuous losses since 2014. The industry anticipates strong compensation demands from Renault Korea Motors, which returned to profitability after three years, and KG Mobility, which recently found a new owner.

Hyundai Motor Company Ulsan Plant Export Shipping Wharf Adjacent Yard

From the management side, a conservative stance is expected as they foresee a tough business environment in the second half of the year, with new car demand shrinking immediately. Although the parts supply difficulties that had hampered the finished car industry have improved, concerns about economic downturns have increased in major markets. Lee Dong-seok, CEO of Hyundai Motor, recently emphasized in a letter to employees, "With numerous pressing issues, we must come together with a mature attitude to resolve internal problems," adding, "If we continue the meaningful changes in labor-management relations built over the years this year as well, we can not only improve the company’s image but also achieve greater results."

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