Hyundai Motor Takes a Breather from Strike, Resumes Negotiations... Union Declares "Complete Suspension of Overtime"

30th Hyundai Motor Union Strike Committee Meeting Held
Negotiations Resumed, Overtime and Training Refused
Union Cautious About Strike but Leaves Possibility Open

The labor and management of Hyundai Motor Company have decided to resume negotiations on this year's wage and collective bargaining agreement, which had been suspended two weeks ago. Although the union secured the right to strike last week, it is cautious about actually implementing it. Instead, they have completely refused overtime work and left open the possibility of going on strike at any time.

On the afternoon of the 30th, the Hyundai Motor union announced that the agenda to resume collective bargaining was unanimously passed at the dispute countermeasure meeting. At the same time, the union decided to completely suspend all overtime work, construction, and training schedules starting from the 4th of next month.

On the 18th, the union declared the breakdown of negotiations, citing the management's failure to present a comprehensive proposal. Afterward, through a strike vote and obtaining a decision to suspend negotiations from the Central Labor Relations Commission, they secured the legal right to strike.

When the union resolved the strike vote with an overwhelming approval rate of 92%, the management requested to resume negotiations first. Lee Dong-seok, CEO of Hyundai Motor, visited the union office on the morning of the 28th and emphasized, "Now is the time for labor and management not to be trapped in a 'league of our own' but to resume negotiations with a more mature attitude and find a reasonable compromise."

[Photo by Hyundai Motor Labor Union]

Industry insiders view the possibility of a Hyundai Motor union strike as low. This is because the current inventory is not large, and the social perception of strikes is not favorable. It is interpreted that the union would feel burdened to force a strike that brings no practical benefit to either side.

On the other hand, as Hyundai Motor is expected to achieve record-breaking performance this year, there are also strong voices insisting that the union must enforce their demands even through a strike. The fact that the union executive term ends this year is also a variable. If the executive team fails to bring satisfactory negotiation results to the union members, it could affect the next executive election.

In the event of a strike, the industry estimates that operating losses could reach 1 trillion won. KB Securities forecasted, based on the cases in 2016 and 2017, that if the Hyundai Motor union goes on strike this year, the loss could amount to 4.2 trillion won in sales and 1 trillion won in operating profit. Of course, losses could be offset later through overtime or inventory, but theoretically, the possibility of losses exceeding 1 trillion won poses a significant risk for the company. In July, the Hyundai Motor union participated in the nationwide general strike of the Korean Metal Workers' Union under the Korean Confederation of Trade Unions for the first time in five years. At that time, the sales loss estimated by management due to a 4-hour production halt reached 53 billion won.

Kang Sung-jin, a researcher at KB Securities, said, "As of the end of July, Hyundai Motor's domestic inventory is about 0.5 months' worth, and global inventory is about 1.3 months' worth," adding, "(If the union enforces a strike) production disruptions at domestic plants will particularly have a direct impact on sales centered in Korea."

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