Motras, Hyundai Mobis Parts Supplier, Goes on Strike
Management Deploys Substitute Workers to Palisade Production Line
Hyundai Motor Company is once again experiencing production disruptions due to a strike by a parts supplier. The company is deploying substitute workers to minimize disruptions to the production of its key model, the Palisade, but the labor union has announced plans for additional strikes. A standoff between labor and management is expected to intensify after the Chuseok holiday.
According to the automotive industry on September 26, the labor union of Motras, a subsidiary of Hyundai Mobis, began a strike at 9 a.m. that day. Both the morning and afternoon shifts are scheduled to strike for six hours each.
In particular, Motras management is making every effort to minimize production disruptions by deploying substitute workers to prevent setbacks in the production of the core model, the Palisade. The company is determined to keep the production lines at Ulsan Plant 2 and Line 1 of Plant 4, where the Palisade is manufactured, operating normally.
However, the operating rate of major production lines at Hyundai Motor Company's Ulsan plant is declining, and even the Palisade production line is experiencing intermittent stoppages. Some lines have been completely shut down.
The automotive industry's production system is based on the "Just In Time (JIT)" method, which means that any disruption in supply from partner companies immediately affects the production line. While this strategy aims to minimize parts inventory and flexibly adjust production volumes, a strike at a parts supplier directly impacts the final assembly line.
Motras, a subsidiary of Hyundai Mobis, manufactures various electronic devices and modules. The labor union at Motras in the Ulsan region is estimated to have about 1,500 members.
Since their initial meeting in May, Motras labor and management have continued negotiations, but remain at odds over the extent of wage increases and measures to secure new orders for job stability. Management recently proposed a monthly base salary increase of 79,000 won, but the union argues that the gap with the 100,000 won base salary increase agreed upon by Hyundai Motor Company's labor and management is too wide to accept.
If the conflict continues, there is a possibility of additional strikes after the Chuseok holiday. The Motras union already participated in a four-hour strike as part of the Korean Confederation of Trade Unions' general strike in July, and held another four-hour partial strike on September 24.
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