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More strikes for Hyundai Motor

Lost production adds up after nine earlier walkouts this year
Dec 02,2017
Hyundai Motor’s workers will strike for the 10th time this year as the carmaker’s sales flounder in major car markets around the world.

The company’s labor union said Friday it will stage a partial strike over four days starting Tuesday after it failed to come to agreement with management over raises and bonuses in a 35th negotiation session held Thursday.

The unionists will stage a two-hour walkout on Tuesday, followed by three-hour walkouts over the following three days.

“It is a pity that the union had to go ahead with a strike at such a difficult time for the company,” said a spokesperson for Hyundai Motor.

The union, which is part of the hard-line umbrella union of Korean Metal Worker’s Union, asked for a base pay raise of 154,883 won ($142.49) in addition to the annual increases linked to a worker’s years of service. The union also demanded bonus payments worth 30 percent of last year’s net profit of the company, which would amount to 1.72 trillion won, as well as an extension of the retirement age.

Management offered a 42,879 won raise. It said the demands of the union were excessive given the company’s poor performance this year, especially in global markets.

From January to September, Hyundai Motor’s sales in the United States, the second largest automotive market in the world, fell over 12 percent decline. In China, the biggest auto market globally, the carmaker’s sales declined by some 30 percent, hit by the political row between Beijing and Seoul over the latter’s decision to deploy an American anti-missile system.

From January to November, Hyundai’s operating profit, which includes domestic and global sales, retreated by 6.1 percent compared to the previous year, according to the carmaker.

The partial walkouts next week will come on the heels of a partial work stoppage on factory lines that manufacture the Kona, a small sports utility vehicle that is one of the company’s best-selling models.

Management wanted to expand production of the Kona in advance of exports of the model to the United States. But the union said it needed the consent of the workers. The near two-day walkout from late Monday to early Wednesday cost the company the production of some 1,200 vehicles, which translated into 17.4 billion won in losses.

While the union claimed last week’s walkout was legitimate, management claimed the strike had nothing to do with wage negotiations and thus was illegal.

“The company will hold anyone involved in this illicit activity accountable in accordance with company policy and regulations,” said the management in a company newsletter on Nov. 29. “For the losses incurred due to the suspension of production, we will apply the ‘no-work, no-wage’ policy.” According to a spokesperson for the company, management is preparing for civil and criminal suits against the union members involved in the walk-out.

Through the nine strikes this year, the company incurred a production loss of some 38,000 cars, which amounts to nearly 800 billion won in losses. Market insiders speculate that if management and the union fail to strike a deal, the effect on Hyundai Motors’ profit this year could be as much as one trillion won. Last year, Hyundai suffered over three trillion won of a loss in profit due to strikes that went on for 24 days.

The union blames management for the falling profit, saying its decision to spend 10 trillion won to buy land in Samseong-dong, southern Seoul, in 2014 and another 20 trillion won to construct a skyscraper there are behind the company’s troubles.

Hyundai Motor isn’t the only auto company with union problems.

The union of Kia Motors, Hyundai’s sister company and the second largest carmaker by sales, filed a lawsuit late last month against the company, asking for salary back payments from 2014 to 2017. The suit came after the company’s loss in a previous legal battle with its union. Last August, the Seoul Central District Court ordered Kia to pay some 420 billion won in salary back payments for the period from 2008 to 2011 and from 2011 to 2014.


BY JIN EUN-SOO, CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]