 |
Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] The labor union at Hyundai Motor has declared a breakdown in this year’s wage negotiations, entering the initial stages of a potential strike, as labor tensions spread across South Korea’s manufacturing sector.
According to the union on June 12, management and labor failed to reach an agreement during the 11th round of wage negotiations held the same day. The union is demanding a monthly base wage increase of 149,600 won (excluding seniority-based raises), performance-based bonuses equivalent to 30% of last year’s net profit, and guarantees on employment and working conditions related to the adoption of new technologies such as artificial intelligence.
The union plans to file for mediation with the National Labor Relations Commission on June 15. It will then hold an extraordinary delegates’ meeting on June 23 to set its strike strategy, followed by a strike authorization vote among union members around June 25.
Under Korean labor law, a strike becomes legally permissible if the mediation process is suspended due to irreconcilable differences and more than half of union members approve the action.
Last year, negotiations were concluded only after the union staged three partial strikes.
Labor tensions are also rising in the steel sector. POSCO has begun its wage negotiations for the year, while the union at Hyundai Steel has moved to secure legal strike rights.
At POSCO, labor-management conflict has intensified over the union’s opposition to the direct hiring of around 7,000 subcontracted workers. At Hyundai Steel, tensions have already surfaced, with the union filing for dispute mediation on June 11.
If the labor authorities determine that differences between the two sides are significant and suspend mediation, Hyundai Steel’s union will gain the legal right to strike.
The Hyundai Steel union is demanding a 150% increase in performance bonuses this year—marking the first time it has specified an increase ratio in its demands. Last year, employees received bonuses totaling approximately 16 million won, including 300% of base salary and a one-time payment of 5 million won.
The union is also seeking a base salary increase of 140,000 won and improvements in welfare benefits, including vehicle purchase support.
Management, however, argues that it cannot accommodate the demands immediately due to deteriorating profitability in its core steel business. Hyundai Steel reported an operating loss of 72.5 billion won in the first quarter, widening by 16.4 billion won from a year earlier.
The union counters that improved productivity per employee—despite a reduced workforce—led to an increase in annual operating profit to 219.2 billion won last year, and should be reflected in compensation.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
