KGM Reaches Labor Agreement as Auto Industry Faces Potential Strikes

KG Mobility (KGM) has confirmed that it has successfully reached a labor agreement, following Korea GM's lead. As the domestic auto industry prepares for a summer vacation next week, companies that have not yet reached an agreement may face intensified labor disputes, including the possibility of a general strike immediately after the break.

According to industry sources on July 30, KGM's labor union conducted a vote among its members on a tentative agreement for this year's labor negotiations, which was ultimately approved. This marks the 17th consecutive year of a no-strike settlement since 2010.

KGM is the second of the five major domestic automakers to finalize a labor agreement, following Korea GM, which reached a tentative agreement on July 22 during its 17th negotiation session.

As the outcomes of labor negotiations vary, the entire auto industry will enter summer vacation next week. All five automakers will observe a simultaneous shutdown from August 3 to 7, primarily affecting factories and research centers. Due to the interconnected nature of production lines and supplier schedules, it is common for major facilities in the auto industry to shut down at the same time.

The second week of August, after the summer vacation, is expected to be a critical turning point for potential strikes in the domestic auto industry. Hyundai Motor is under particular scrutiny, as official negotiations between the company and its labor union have been stalled since July 8. The union has been conducting its third partial strike since July 29. If no agreement is reached immediately after the vacation, the likelihood of escalating actions, including a general strike, increases.

The Kia union has also secured the right to strike following a decision by the Central Labor Relations Commission to cease mediation. In a vote held on July 23, 82% of eligible members and 92.5% of voters approved the motion. The union plans to hold its first central response committee meeting to discuss the timing and methods of a potential strike. There are concerns that the five-year streak of no-strike settlements, which began in 2021, may come to an end.

Renault Korea is also set to intensify limited labor actions. The union plans to conduct an eight-hour designated strike involving all expanded committee members. Despite 12 negotiation sessions since their initial meeting in April, disagreements over wage increases and production volume at the Busan plant remain unresolved. This time, the union plans to focus its strike on new models like the Polestar 4, but there is a possibility that limited actions could spread across the entire production line.

An industry insider stated, "If there is no progress in negotiations, the level of strikes will increase, and production disruptions in the second half of the year are inevitable."