Record-Breaking Performance Expected This Year
Performance Bonuses Fall Short of Last Year’s Compensation
The wage and collective bargaining negotiations between Hyundai Rotem's labor and management have finally been approved after six months of intense confrontation. Despite the company experiencing an unprecedented boom, with annual operating profit expected to surpass 1 trillion won for the first time since its founding, there is growing internal criticism that the size of the performance bonuses has actually decreased compared to last year, running counter to the company’s record results.
Hyundai Rotem Headquarters and Research Center in Uiwang, Gyeonggi Province. The Asia Business Daily DB
According to industry sources, on the morning of December 24, Hyundai Rotem’s labor and management approved the tentative agreement with a 59.38% approval rate. Out of 1,248 voters, 741 voted in favor, 506 opposed, there was 1 invalid vote, and 185 abstentions. The agreement, which was tentatively reached the previous day, includes a wage increase of 90,000 won, a performance bonus of 450% plus 16 million won, and a 200,000-won Onnuri gift certificate.
The reason for the internal discontent is that the scale of compensation has moved in the opposite direction of the company’s performance growth. In the third quarter of this year, Hyundai Rotem recorded an operating profit of 277.7 billion won, marking its highest-ever quarterly result. Cumulative sales for the first to third quarters reached 4.2134 trillion won, with operating profit at 738.2 billion won. The company is expected to surpass an annual operating profit of 1 trillion won for the first time in its history this year, which is double the figure from the previous year.
However, the approved compensation package does not reach last year’s levels, which included a wage increase of 1.02 million won and a performance bonus of 500% plus 18 million won.
The Hyundai Rotem labor union has long demanded improvements to the so-called “dual wage” structure. The union claims that, since 2018, new hires have been subject to different standards for calculating bonuses, overtime pay, and annual leave compared to existing employees, resulting in a significant gap in actual wages for the same work. The union says that through negotiations over the past two years, the issue has been resolved for 700 out of about 800 affected employees, and this year, they have demanded the complete elimination of the dual wage system.
However, management has stated, “There is no dual wage system,” explaining, “Those hired before the revision of the Labor Standards Act were subject to different terms under the collective agreement, and following the Supreme Court’s ruling on ordinary wages, the wage system was restructured through labor-management agreement, which resulted in differences in wage calculation for employees hired after the agreement.”
In the end, no agreement was reached on this issue in the latest wage and collective bargaining negotiations.
The criticism is now being directed at the management team, including President Lee Yongbae, who secured a third consecutive term in the recent group personnel reshuffle, and Kim Iksoo, Head of Management Support. Although President Lee is recognized as the longest-serving and oldest CEO within Hyundai Motor Group, praised for his management skills, he is being criticized for his reluctance to share the company’s success with employees.
One Hyundai Rotem employee asked, “What employee would work harder at a company that doesn’t recognize their efforts?” Another employee commented, “When times were tough, the company asked us to accept lower bonuses for the sake of the company, but now that performance has improved, they still do not provide proper compensation.”
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