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April 28, 2017

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Costly walkouts at Hyundai Motor end with agreement to raise wages

SEOUL -- Hyundai Motor's labor union has voted to accept a deal for increased wages and the elimination of overnight shifts, ending one of the costliest strikes ever at South Korea's largest car maker.

The union, which elected a hard-line leader at the end of last year, walked out on July 13, starting the first strike at Hyundai in four years. The union staged walkouts that totaled 92 hours in July and August. That resulted in lost output of 82,000 vehicles worth 1.7 trillion won (US$1.5 billion), according to the company.

In a vote Monday, 53 percent of more than 41,000 unionized workers voted to approve the deal that union leaders and Hyundai management hashed out last week, according to the union.

The union and Hyundai agreed that from March a second shift that started at 9 p.m. and ended at 8 a.m. would be replaced with a shorter shift that starts earlier and ends at 1 a.m.

To make up lost production from reduced working hours, Hyundai Motor will invest 300 billion won in facilities while the union has agreed to increase the number of vehicles produced per hour. Workers get a 98,000-won increase in salary as well as other incentives and bonuses as part of the deal.

Hyundai Motor Co. is the first to put an end to labor unrest that has gripped South Korea's auto industry this year. Workers at Kia Motors Corp. and General Motors Co., South Korea second- and third-largest automakers, also have staged limited strikes to press demands for higher wages and an end to overnight shifts. Earlier this month, unionized workers at GM's Korea union rejected a tentative deal reached between management and the union leaders.

"Hyundai Motor management is pleased that the labor union members approved the agreements made last week, putting an end to the strikes. Our priority now is to normalize production and fulfill customers' expectations," the company said in a statement.

The industrial action compounded difficulties for Hyundai. In August, the carmaker said its domestic sales declined 30 percent over a year earlier.

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