Breakdown Declared at 17th Negotiation Round
Difficult Wage Talks Expected This Year
Negotiations for this year's wage and collective bargaining agreement at Hyundai Motor Company have broken down. Labor and management remain in a standoff over key issues such as base salary increases, performance bonuses, and the extension of the retirement age, resulting in a difficult negotiation process for this year's agreement. The union appears set to declare a breakdown in talks in order to prompt management to present its first proposal, and will likely move to secure the legal right to strike.
On August 13, the Hyundai Motor union announced, "Management has not presented a comprehensive first proposal and is displaying an insincere attitude at the bargaining table," and stated its intention to suspend negotiations for the time being. The union, which has held more than 17 main and working-level negotiation sessions, demanded that management present its first proposal and speed up negotiations within this week. However, management countered that a proposal could only be made after sufficient working-level talks, once partial agreements have been reached on major issues.
This year, in particular, sharp disagreements have emerged between labor and management regarding business performance, especially in light of the impact of U.S. tariffs. Management is emphasizing the need for the company to secure investment resources for future growth engines to prepare for uncertainty, while the union is responding that, given Hyundai Motor Group's recent operating profit reaching the global top two, a fair distribution of results must be ensured.
With the talks declared broken, the union is expected to begin the process of securing the legal right to strike in order to pressure management. This involves applying for mediation with the Central Labor Relations Commission, and if mediation is suspended, the union can hold a vote among its members to secure strike authorization. If more than two-thirds of all union members vote in favor, the union obtains the legal right to strike at any time.
However, the likelihood of the union actually going on strike appears low. Last year as well, the Hyundai Motor union secured the right to strike, but managed to reach a dramatic tentative agreement just before a walkout, maintaining a record of six consecutive years of dispute-free negotiations.
Hyundai Motor Company labor-management representatives having a preliminary meeting for this year's wages and collective agreement at the Ulsan plant last June. Photo by Yonhap News
In this year's wage and collective bargaining negotiations, the Hyundai Motor union is demanding: ▲ a base salary increase of 141,300 won; ▲ a performance bonus equivalent to 30% of net profit; ▲ a 4.5-day workweek with no wage reduction (four-hour reduction on Fridays); ▲ an extension of the retirement age to 64; ▲ a progressive severance pay system; ▲ up to a 25% discount on electric vehicles for retirees; and ▲ a consolation payment of 20 million won per person based on ordinary wages.
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