The 1st Union Continues Guerrilla Strikes
5 Months of Disruption... Damage Estimated at Over 50 Billion Won
[Asia Economy Reporter Seong Giho] Hankook Tire & Technology (hereinafter Hankook Tire) is suffering from guerrilla strikes by the Hankook Tire branch of the Korean Metal Workers' Union, affiliated with the Korean Confederation of Trade Unions, which have continued for five months. Recently, as the Cargo Solidarity strike that lasted for half a month ended, the tire industry has breathed a sigh of relief, but Hankook Tire remains preoccupied with concerns over strikes.
Due to the previous Cargo Solidarity strike, Hankook Tire's shipment volume dropped to the 40% range. The industry expects Hankook Tire's shipment volume to normalize after the 12th. However, Hankook Tire's troubles continue. Although shipment volume is recovering, production is being affected by the union's guerrilla strikes. Starting this year, Hankook Tire has shifted to a multiple union system with the branch under the Metal Workers' Union of the Korean Confederation of Trade Unions and the Hankook Tire & Technology Labor Union under the Federation of Rubber Industry Unions affiliated with the Federation of Korean Trade Unions. Initially, the union played the role of the representative union, but this year the branch has risen to become the primary union.
The union has already held a signing ceremony for a wage negotiation agreement in September, which included a 5.0% basic wage increase. The labor and management agreed on a 5.0% increase in basic wages (including seniority increments) and a production incentive of 1 million KRW, with 60.1% of union members approving the agreement. Meanwhile, the branch is still continuing negotiations. The branch is reportedly demanding an additional 0.6% basic wage increase and a one-time payment of 2 million KRW on top of the union's agreement. A branch official stated, "The total amount of the basic wage increase proposed by the branch is smaller than Chairman Cho Hyun-bum's annual salary, but the company has not presented any additional proposals for negotiation."
As wage negotiations stalled, the branch has been conducting guerrilla strikes since July. Additionally, a general strike was held on the 7th. It is known that about 2,000 union members belong to the branch. The industry estimates that the branch's strikes have caused losses in the order of 10 billion KRW per month. Considering the guerrilla strikes have been ongoing since July, losses amounting to approximately 50 billion KRW have occurred.
Hankook Tire recorded an operating profit of 642.2 billion KRW last year, but its domestic factories posted losses. In the first quarter, it earned an operating profit of 126 billion KRW, but this was a 32.2% decrease compared to the same period last year. Furthermore, due to strikes in the second half of the year, a loss at domestic factories for the second consecutive year is inevitable.
Hankook Tire is considering factory closures if the branch's strikes continue long-term. In a meeting with the union, the company stated, "If the strike prolongs, we may consider a workplace closure." A Hankook Tire official said, "We are not seriously considering factory closures yet," adding, "We only mentioned at a general level that it could be considered if the strike prolongs."
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