[Asia Economy Reporter Su-yeon Woo] The wage and collective bargaining agreement (CBA) negotiations between Hyundai Motor Company’s labor and management have passed the fourth milestone after 10 rounds of talks last week. However, detailed clause adjustments remain, and this week, when the wage proposal is expected to be presented, is seen as a turning point for reaching an agreement before Chuseok.
According to the automotive industry on the 14th, Hyundai Motor’s labor and management completed the 10th round of negotiations last week and agreed on 4 out of 10 separate demands from the labor union. The remaining 6 demands, including the performance bonus request, are still reported to have unresolved differences.
For an agreement before Chuseok, the management side needs to present a wage increase proposal within this week. However, management has stated that it is difficult to present a wage proposal while the other 6 demands remain unsettled. On the other hand, the union insists that scheduling the next negotiation is meaningless before management presents the wage proposal.
On the 13th of last month, Hyundai Motor's labor and management are sitting at the negotiation table and talking during the opening ceremony of this year's wage and collective agreement negotiations held at the main building of Hyundai Motor's Ulsan Plant. Photo by Hyundai Motor
Hyundai Motor Labor and Management Reach Agreement on 4 out of 10 Demands
By the 11th, Hyundai Motor’s labor and management had conducted 10 rounds of negotiations and completed a partial draft of the “Labor-Management Win-Win Development Social Declaration” agreement. The agreed items so far include ▲continuous discussion on electric vehicle (EV) dedicated factories ▲total employment guarantee and win-win measures with parts suppliers ▲operation of job transition programs ▲COVID-19 infection prevention measures.
First, the EV dedicated factory will continue to be discussed through the Future Change Response Task Force (TFT) and the Employment Stability Committee. Additionally, the TFT agreed to establish the direction of a job transition education program aligned with the EV era by at least the first half of next year.
Regarding total employment guarantee, management will maintain domestic factory production at about 1.74 million units annually, while the union will make every effort to ensure timely supply of new and popular models. Furthermore, labor and management will continue cooperation to strengthen quality by forming quality councils by business division and holding quality seminars twice a year.
Meanwhile, labor and management have yet to narrow differences on sensitive items. Detailed issues include ▲improvements and extension of senior contract worker treatment ▲abolition of core time ▲construction of an automobile museum ▲request for 30% performance bonus from net profit ▲wage system improvement demands ▲reinstatement of dismissed workers.
In particular, the senior contract system for reemploying retirees has sharply divided labor and management positions. The union views it as an opportunity to improve quality by acquiring the know-how of artisans who have worked in one field for over 30 years, whereas management opposes it, fearing it could signal an extension of the retirement age.
Whether Management Presents Wage Proposal This Week Is a Turning Point for Agreement Before Chuseok
Besides the senior contract issue, sensitive matters such as performance bonuses and wage system improvements remain, so negotiations this week are expected to be difficult. The union has declared it will not proceed with further negotiations without management’s wage proposal, while management insists that a prior agreement on the other 6 demands is necessary before presenting the final wage proposal.
With less than two weeks left before the Chuseok holiday, the wage proposal must be presented at least this week to hope for a final agreement before Chuseok. The union is putting great effort into reaching an agreement before Chuseok, prepared to engage in strong protests if the agreement fails. A Hyundai Motor union official said, “Negotiations will proceed only if management presents a substantive wage proposal this week. If it extends beyond Chuseok, we will have no choice but to prepare for a dispute and struggle.”
Notably, this Hyundai Motor labor-management negotiation is the first CBA negotiation since the new union leadership took office and is attracting industry attention as it also reflects variables caused by COVID-19. The industry is closely watching, as the outcome of Hyundai Motor’s union negotiations could influence the negotiation direction of group affiliates such as Kia Motors, Hyundai Mobis, and other companies affiliated with the Metal Workers’ Union this year.
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