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Hyundai Motor union nixes deal

Dec 26,2017
Members of the Hyundai Motor Group’s union rejected a 2018 wage deal struck by the union leadership and management in a vote Friday, an unexpected turn that will drag the wage issue into the next year for the nation’s top carmaker.

This is the first time since the company’s founding in 1967 that wage negotiations failed to be accepted before a year’s end.

The union said Saturday that 50.2 percent of union workers, or 22,611 who cast ballots Friday, voted “No.” Fourty-eight percent, or 21,707, workers, approved. A majority vote is required. Voter turnout was 88.4 percent.

In the failed deal, the union and management representatives agreed to raise workers’ basic monthly wages by 58,000 won ($53.90) and provide bonuses of 300 percent of basic pay on top of incentives worth 3 million won for next year.

The union attributed the surprise rejection to less-generous benefits in the new deal compared to this year’s. In the 2017 deal, the two sides raised the basic monthly pay by 72,000 won and provided bonuses of 350 percent of basic pay and incentives worth 3.3 million won.

The union, which is part of the hardline Korean Metal Worker’s Union, is expected to face criticism for rejecting the deal at a time of tough business conditions, including poor sales in both the Chinese and American markets.

From January to September, Hyundai posted 3.25 trillion won in net profit, 30 percent down compared to the same period the year before. Global sales dropped to 4.09 million cars for the first 11 months of this year, a 6.1 percent decrease from last year’s 4.85 million.

It wasn’t the first time the union rejected a wage deal. It voted against one agreement in 2008. In August 2016, union members struck down a tentative deal for 2017 that called for a 68,000 won hike in basic pay. They then carried out strikes. Two months later, the union accepted a deal that included a 72,000 won increase in basic pay.

The union will hold a meeting Tuesday to discuss next moves, which entail three options. The first is to immediately restart negotiations with management to produce a new deal and have it voted on by union members. The second is to continue partial walkouts to gain an upper hand in wage talks. With this year’s walkouts, Hyundai Motor has experienced strikes every year since 1986 except for four: 1994, 2009, 2010 and 2011.

The third option is to wait until February for negotiations since the union will elect new representatives in January.

A Hyundai official told the JoongAng Ilbo that the company did its best to find middle ground with the union amidst tough business conditions. “We expect the union to solve this issue wisely as the tentative deal was reached by the union’s leadership members,” said the official.


BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]