Kia Union Also Approves Strike Vote... Increasing Strike Risk in the Complete Vehicle Industry

Hyundai Motor Reaches Uncontested Agreement Before Summer Vacation
Kia, Korea GM, and Renault Korea Prepare for Strike

[Asia Economy Reporter Seong Giho] A wave of strikes is looming over domestic automakers. While Hyundai Motor, the industry's eldest sibling, concluded wage and collective bargaining agreements (wage and collective bargaining, or wage and labor agreements) early without disputes before the summer vacation, Kia, Korea GM, and Renault Korea labor unions are preparing for strikes. The industry is concerned that if strikes follow amid delays in new car deliveries due to a shortage of automotive semiconductors, production disruptions could be prolonged.

According to the industry on the 20th, Kia's labor union held a strike action vote among its members until the previous day. Out of 28,200 union members, about 24,200 voted, with an approval rate of 89.4%, passing the motion. Kia management and labor held seven rounds of wage and collective bargaining this year, but the union declared a breakdown in negotiations on the 11th.

The Kia union is showing a tough stance, stating, "If there is no acceptable proposal, we will fight even beyond Chuseok." The union demands a basic wage increase of 165,200 KRW and a 30% performance bonus based on operating profit. On the 11th, the union applied for dispute mediation at the Central Labor Relations Commission. Following the approval of the strike vote and if the commission decides to suspend mediation, the union will meet the conditions to legally strike.

The Korea GM and Renault Korea unions have also completed preparations for strikes. The Korea GM union passed strike action votes held on the 16th and 17th. Out of 7,622 members, 6,329 voted in favor, recording an approval rate of 83%.

The union had previously applied for mediation at the Central Labor Relations Commission on the 12th. If the commission decides to suspend mediation, the union will secure the right to strike and other dispute actions. The Korea GM union has demanded a fixed monthly basic wage increase of 142,300 KRW and a performance bonus of 400% of the ordinary wage (approximately 16.94 million KRW) during negotiations.

The Renault Korea union secured an 80.6% approval rate in a strike vote held last month. The union demands a basic wage increase of 97,472 KRW, a lump sum payment of 5 million KRW, regular employment, an increase of regular bonuses to 600%, and an employment stability agreement.

The industry is concerned that this labor-management conflict will be prolonged. In particular, since the unions are demanding large-scale investments from companies regarding future growth engines, there are forecasts that the conflict will not be easily resolved.

The Kia union is demanding the establishment of a future car factory domestically to ensure employment stability. Especially regarding Hyundai Motor Group's recent announcement of investment plans of 13 trillion KRW in the U.S. and 63 trillion KRW domestically, the union states, "There are no concrete plans," and demands, "Stop reckless overseas investments to create quality youth jobs."

The Korea GM union is requesting electric vehicle production work at the Bupyeong Plant 2, which is scheduled to cease operations by the end of the year. They also demand development plans for each plant, including Bupyeong Plants 1 and 2 and Changwon Plant. On the other hand, management claims they will import and sell all ten electric vehicle models by 2025. Renault Korea is in conflict with the union after proposing to change the wage and collective bargaining cycle to multiple years. They are also recruiting participants for a lawsuit to invalidate the wage peak system.

An automotive industry official said, "If the unions strike following the shortage of automotive semiconductors, consumer damage is inevitable," and pointed out, "We hope consideration is given to consumers inconvenienced by waiting for new cars."