Will the Deadlock Over Wage Talks Continue?
Calls for Record-High Bonuses Amid Growing Tariff Pressures
Retirement Age Extension and 4.5-Day Workweek Seen as "Excessive Political Demands"
As wage and collective bargaining negotiations (wage negotiations) in the automotive industry stall, the atmosphere of potential strikes is spreading. The Hyundai Motor labor union, which has maintained a record of six consecutive years without labor disputes, has internally decided to go on strike next month if necessary. The union's demands now include political issues such as extending the retirement age and introducing a 4.5-day workweek, making it even harder to find common ground.
According to industry sources on August 17, the Hyundai Motor labor union has established negotiation guidelines centered on "initiating industrial action next month and reaching an agreement before Chuseok." So far, labor and management have been locked in a standoff over key issues such as base salary increases and performance bonuses, causing negotiations to stall. Some union members argue that a show of force is inevitable to enhance their bargaining power.
Representatives of labor and management at Hyundai Motor Company are holding a ceremony for this year's wage and collective agreement on June 18 at the Ulsan plant. Photo by Yonhap News
In response, after declaring the breakdown of wage negotiations on the 13th, the union applied to the Central Labor Relations Commission for mediation in industrial action. If a work stoppage is decided, a strike authorization vote will be held on the 25th. If more than half of all union members vote in favor, the strike will be legally sanctioned.
Will Hyundai Motor Break Its Seven-Year Streak of Labor Peace?
Industry observers believe that this year's record of labor peace may be broken, as the gap between labor and management remains wide. The union is demanding a base salary increase of 141,300 won (excluding step raises), a performance bonus equivalent to 30% of last year's net profit, inclusion of various allowances in ordinary wages, and the increase or establishment of allowances by job category or duty.
On the other hand, the company maintains that it must respond to worsening business conditions caused by U.S. tariffs. The management has not yet presented its proposal. Hyundai Motor CEO Lee Dongseok reportedly emphasized during negotiations, "Tariffs are beyond the company's control, so labor and management must work together to ensure mutual survival and coexistence."
There are additional reasons why labor-management talks are stalling. The union is demanding that the retirement age, currently 60, be extended to the age when employees become eligible for the national pension, as well as the introduction of a 4.5-day workweek (four hours of work on Fridays). Since both demands are tied to political issues, the company insists that discussions at the government level should take place first.
In contrast, the labor sector wants Hyundai Motor's powerful union to reach an agreement on these issues before any negotiations with the government. An industry representative commented, "If Hyundai Motor's union, which is considered a leader in the labor movement, reaches an agreement on extending the retirement age or introducing a 4.5-day workweek, it will be a strong card to play in future tripartite negotiations among labor, management, and government. The union is well aware of this."
Kia's labor and management also began wage negotiations on the 12th. The union is demanding a base salary increase of 141,300 won, the introduction of a 4.5-day workweek, and a special performance bonus of over 20 million won. Since the demands of the two unions are similar, the outcome of Hyundai Motor's negotiations is expected to influence Kia's talks as well.
Will GM Korea Escalate Its Struggle?
As GM Korea's summer vacation ended last week, attention is focused on whether wage negotiations will resume. The GM Korea union plans to convene a central dispute countermeasures committee on the 18th to discuss future bargaining and protest strategies.
Whether wage negotiations at GM Korea will resume remains uncertain. The union is demanding a complete reconsideration of the sale of the Bupyeong plant site and nine directly operated service centers, which the company announced in May. As a result, negotiations have not progressed.
In addition, with the investment agreement between General Motors (GM) and Korea Development Bank set to expire in 2028, and the timing of joint development of five new models between Hyundai Motor and GM coinciding, speculation about GM's potential withdrawal from Korea has not subsided.
Lee Hangoo, a research fellow at the Korea Automotive Technology Institute, analyzed, "The Hyundai Motor-GM partnership is aimed at exports to Central and South America, so the direct impact on GM Korea is limited. However, since GM is seeking to reduce production costs by investing in U.S. plants, GM Korea will inevitably face competition with local plants and cost-cutting pressures in the future."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
