[Exclusive] Hankook Tire Reaches Dramatic Labor Wage Agreement... Resumes Normal Operations

6% Wage Increase, 5 Million KRW Performance Bonus, and 2 Million KRW Negotiation Settlement Agreed
Line to Resume Normal Operation from This Afternoon

[Asia Economy Reporter Ki-min Lee] The wage negotiations between the labor and management of Hankook Tire & Technology were dramatically concluded after a 24-day general strike.

According to the tire industry on the 19th, Hankook Tire's labor and management held a mediation committee meeting on the 17th, after 26 days of partial strikes and 24 days of general strikes, and concluded the wage negotiations after a marathon session.

According to the agreement, the management will raise wages by 6% this year and pay a performance bonus of 5 million KRW and a negotiation settlement bonus of 2 million KRW. The union had demanded a 10.6% wage increase this year, citing that the wage increase rate over the past five years was between 2-3% and that wages were frozen last year, and had launched a general strike on the 26th of last month.

On the other hand, the management argued that it was difficult to accept the union's demands due to external factors such as rising raw material and shipping costs this year, proposing a 5% wage increase and a 5 million KRW performance bonus, leading to difficulties in the wage negotiations.

However, as the first general strike at the Daejeon and Geumsan plants since Hankook Tire's founding in 1962 extended beyond 20 days, negative impacts occurred on domestic and export sales in the fourth quarter of this year.

First, T Station, a specialty store for replacement tires (RE), and dealerships experienced tire inventory shortages. Not only RE but also original equipment (OE) tires for vehicle manufacturers faced supply restrictions, causing some automakers to allocate part of their OE tire volume to Kumho Tire or Nexen Tire.

As the decline in performance intensified, both labor and management shared a sense of crisis and reportedly held a mediation committee to resolve the wage negotiations. With the conclusion of the wage negotiations, Hankook Tire union members ended the general strike and began returning to the production lines from the 18th. From the afternoon of that day, the Daejeon and Geumsan plant lines are expected to operate normally.

A Hankook Tire official explained, "In a situation where the internal and external business environment is becoming more difficult, we plan to overcome uncertainties through labor-management cooperation and focus on normalizing plant operations."