Background of Difficult Labor-Management Negotiations in Automakers: "We Must Share the Results" vs. "The Second Half Will Be Difficult"

Signs of Spring Fully Evident in Completed Vehicle Labor-Management Relations

The signs of a summer struggle (夏鬪) in the completed car industry have become clear. With improved performance, the labor union's expectations have risen, but the company is concerned about the challenging market environment in the second half of the year. This means that both labor and management are looking in completely different directions.

It is also difficult to reconcile differences as demands that are hard to decide at the individual company level, such as extending the retirement age, have been brought to the negotiation table. Due to COVID-19, negotiations have been concluded in recent years without visible conflicts, but there are forecasts that this year could be different.

In mid-June, Hyundai Motor labor and management held a preliminary meeting for this year's wage and collective bargaining negotiations.

According to explanations from major completed car companies, the Metal Workers' Union Hyundai Motor Branch (hereinafter Hyundai Motor Union) will hold a temporary delegates' meeting on the 23rd to discuss the agenda for dispute occurrence. On the 25th, a vote on whether to take industrial action will be held among union members. Earlier, the company and the union began several rounds of main negotiations starting with a preliminary meeting in June.

After concluding negotiations on the 18th, the union stated, "The management repeatedly said 'absolutely impossible,' 'heavy,' and 'watching closely' for each agenda item," and added, "Since they do not present any advanced proposals, we will declare the breakdown of negotiations." A company official said, "The company will be able to present proposals only after narrowing down the collective bargaining agenda to some extent, but that has not happened yet."

Until the resolution to take industrial action is made, opinions will be exchanged at the working-level, but due to the large gap in positions, coordination is difficult. In particular, the union has raised the extension of the retirement age as a major issue, but the company responded with 'absolutely impossible,' deepening the emotional divide between labor and management.

Separately from this wage and collective bargaining negotiation, the fact that the current union leadership is in its final year of term is also considered a variable. For the union, it is important to give the impression to members that they are firmly standing up to management and pushing their demands as much as possible. If an actual strike occurs, it would be the first strike related to wage and collective bargaining in five years.

Hyundai Kia Motors headquarters building illuminated at night. Photo by Hyunmin Kim kimhyun81@

Negotiations are also not smooth at other completed car companies. The situation is similar at Kia, where labor and management have been meeting face-to-face since last month. Since the wage and collective bargaining agenda is similar to Hyundai Motor's, it is difficult to find common ground between labor and management. Kia labor and management have decided to speed up negotiations by holding talks every day for three days starting from the 22nd this week. The Korea GM labor and management are also experiencing difficulties in negotiations over wage increase amounts, and the union has applied for mediation at the Central Labor Relations Commission. Renault Korea Motors labor and management prepared a tentative agreement and put it to a vote among union members, but it was rejected.

The reason labor and management in the completed car industry are struggling in negotiations is interpreted as a large difference in perception regarding recent company and industry conditions. The union believes that since they tightened their belts due to difficult management conditions such as COVID-19, employees should receive more benefits now that profitability has improved. Hyundai Motor and Kia have posted record-high performance, and other completed car companies are also not performing poorly. On the other hand, the company side is worried about the shrinking domestic and overseas new car sales markets.

An official from a completed car company who requested anonymity said, "The company's good performance since last year is due to unexpected variables such as exchange rate effects, not because the actual business itself is booming," and added, "I feel that labor and management have completely different perspectives regarding the recent company situation."

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