Hyundai Motor’s South Korean union to vote on strike.
Hyundai Motor Union Votes on Strike Amid Wage Negotiations
By Heekyong Yang
SEOUL (Reuters) – Hyundai Motor’s unionised workers in South Korea are facing a crucial decision today. They will vote on whether to hold a strike after two months of talks with the company over wage increase and extension of the retirement age stalled last week.
If the union stages a strike, it would mark the first such action in five years related to wage negotiations at the South Korean carmaker, and could disrupt delivery of some popular vehicles which Hyundai has been struggling to ramp up due to prolonged component shortages.
The union, one of the biggest in the country with about 40,000 members, is seeking a minimum basic monthly pay increase of 184,900 won ($139) and a performance pay equating to 30% of Hyundai’s 2022 net profit. It is also demanding Hyundai’s management to raise the retirement age to 64 from 60.
The voting result is expected at around 6 p.m. (0900 GMT), a union official at Hyundai Motor told Reuters, adding that the union will continue working-level negotiations with the management regardless of the vote.
Hyundai Motor did not immediately respond to Reuters request for comment.
Experts noted that South Korea’s rising life expectancy and weaker social safety net, such as retirement pension, have attributed to workers’ demand to raise the retirement age.
“South Korea has relatively low pension replacement rates, compared to other advanced countries in Europe. While those advanced European countries have replacement rates at about 60-70%, South Korea’s rate practically stands at about 30%, which make it difficult for people to replace their pre-retirement wages,” said Park Ji-soon, a professor specialized in social security law at Korea University’s School of Law.
Unionised workers at Hyundai in South Korea held a four-hour strike for one day in July in support of its umbrella union’s general strike, but it was not related to the union’s wage negotiations with the management.
Analysts said the union would likely avoid prolonged industrial action partly due to unfavourable public sentiment, as the auto industry remains one of few bright spots in the country’s sluggish economy.
“We are not expecting the strike to last too long even if the union does stage a strike, however, if the strike lasts longer than three days, which could be viewed as about 10% of Hyundai’s monthly output, it could visibly disrupt Hyundai’s operations,” said Kim Jinwoo, an analyst at Korea Investment & Securities
Shares in Hyundai Motor were trading down 0.1%, versus the benchmark KOSPI’s 0.6% fall as at 0234 GMT.
($1 = 1,328.0600 won)
(Reporting by Heekyong YangEditing by Shri Navaratnam snd Michael Perry)
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