Hyundai Motor, Tentative Agreement on Labor-Management Negotiations... Basic Salary Increased by 111,000 Won (Comprehensive)

Record High Performance and Incentive Bonuses Reflected
Plan to Hire 800 Additional Technical Staff
Completion Upon Approval in Member Vote on 19th

Hyundai Motor Company's labor and management reached a tentative agreement on June 12 regarding this year's wages and collective bargaining, which includes a base salary increase of 111,000 KRW and additional new hires for technical positions.

The labor and management parties announced that they derived the tentative agreement during the 23rd negotiation session held at the Ulsan plant on the same day. The tentative agreement centers on a base salary increase of 111,000 KRW (including step increments). It also includes a 300% + 8 million KRW performance bonus for 2022 business results, a special incentive of 2.5 million KRW commemorating the 'World Car of the Year' award, a 100% incentive for achieving the second half of 2023 business goals, a separate agreement on 15 shares related to the 2023 collective bargaining settlement, and traditional market gift certificates worth 250,000 KRW (expected to reflect an annual salary increase rate of about 12% compared to the previous year).

Hyundai Motor Company labor and management are holding a preliminary meeting for wage and collective bargaining at the main building's companion room of the Ulsan plant, with about 70 negotiation representatives in attendance. [Image source=Yonhap News]

The labor and management parties reached the agreement based on the fact that despite difficult business conditions such as global supply chain disruptions causing parts shortages and geopolitical risks worldwide last year, they achieved the best business performance and exceeded this year's business goals. Hyundai Motor Company’s consolidated sales and operating profit for the second quarter of this year were provisionally estimated at 42.2497 trillion KRW and 4.2379 trillion KRW, respectively, marking the first time operating profit exceeded 4 trillion KRW. Hyundai Motor Company recorded its highest-ever performance for three consecutive quarters.

The labor and management also prepared a 'special agreement' to address the national issue of low birth rates. Paid leave for infertility treatment was extended from the existing 3 days to 5 days, and infertility treatment expenses will be supported without limit on the number of times, up to 1 million KRW per treatment. Childbirth congratulatory money will be provided as 3 million KRW for the first child, 4 million KRW for the second, and 5 million KRW for the third and beyond. A 'Mom and Dad Voucher' system was established to provide vouchers of 500,000 KRW for the first child, 1 million KRW for the second, and 1.5 million KRW for the third when employees’ children celebrate their first birthday.

Childcare support measures were also expanded, with a total of 2.4 million KRW to be provided over two years for early childhood education expenses from ages 4 to 5. The period for using reduced working hours during childcare was extended, and vouchers to celebrate a child's first day of school will be provided: 500,000 KRW for the first child, 1 million KRW for the second, and 1.5 million KRW for the third.

Hyundai Motor Group Yangjae-dong Office Building Exterior.

To address youth unemployment, the labor and management parties will increase new hires for technical positions. Following last year’s negotiation agreement to hire 400 people in 2023 and 300 in 2024, they agreed in this negotiation to additionally hire 800 people: 500 in 2024 and 300 in 2025. The timing and method of hiring will be decided considering various conditions such as workforce management and technological changes.

The labor and management also increased their annual contribution to social contribution activities from 5 billion KRW to 6 billion KRW. A Hyundai Motor Company official said, "Amid concerns and interest from many stakeholders such as customers and partners watching this year’s labor-management negotiations, labor and management were able to conclude through dialogue," adding, "We will work together to produce the highest quality automobiles." Regarding the contentious issue of extending the retirement age, labor and management agreed to consult if there is a legal amendment by the first half of next year due to government policy and changes in social awareness.

Although the labor and management reached this tentative agreement without a strike, the negotiation will be fully concluded only if a majority approves it in a vote of all union members on the 18th. If the vote is rejected, there is a considerable possibility of a union strike. Previously, labor and management had reached four consecutive years of strike-free tentative agreements from 2019 through last year. If this year also concludes without a strike, it will be the first time since the union’s founding in 1987 to achieve five consecutive strike-free agreements. The union had initially planned a 4-hour partial strike on the 13th and 14th but postponed it following the release of the tentative agreement.

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