Hyundai Motor and Kia are struggling to reach an agreement on wage and collective bargaining negotiations. The Hyundai union is intensifying its strike actions in August, following similar actions in July, while the Kia union is also facing challenges in finding common ground with management. Observers suggest that this year's negotiations may not conclude before the Chuseok holiday, as Hyundai has failed to meet the heightened expectations of its employees, who have seen substantial bonuses from companies like Samsung Electronics and SK Hynix.
On August 11, the Hyundai union held a central countermeasure committee meeting and decided to conduct additional strikes on August 12 and 13, each lasting four hours, and on August 14 and 18, each lasting six hours. This means the union will carry out a total of eight hours of partial strikes on August 12 and 13, followed by 12 hours on August 14 and 18. The next committee meeting is scheduled for August 18.
The ongoing strikes are expected to exacerbate production disruptions at Hyundai. The union previously conducted a partial strike from July 13 to 15, followed by additional strikes on July 20 to 22 and July 29 to 31, resulting in a total of 60 hours of production loss and an estimated 42,510 vehicles affected.
While the company has not disclosed the exact financial impact, it is estimated that the production disruptions could lead to losses of around 1.8 trillion won, considering Hyundai's hourly revenue loss is approximately 18.7 billion won. The reduction in employee wages due to the strikes is also increasing, with Hyundai estimating an average wage loss of about 1.92 million won for technical staff and a severance loss of 14.01 million won for employees with 30 years of service.
The last proposal from management included a monthly base salary increase of 89,000 won, a performance bonus of 350% plus 10 million won, and the issuance of 15 shares. In contrast, the union is demanding a monthly base salary increase of 149,600 won, a performance bonus of 30% of last year's net profit, and an increase in bonuses to 800%. Additionally, the union is calling for the reinstatement of members who were dismissed for illegal activities during past union activities, an extension of the retirement age, and an increase in bonuses.
The main points of contention between the two sides are the reinstatement of dismissed workers, the pre-agreement on the legalization of retirement age extension, and a 50% increase in bonuses. Hyundai maintains that these three demands are not negotiable, arguing that the status of dismissed workers has already been determined by court rulings and that individual companies cannot unilaterally decide on retirement age extensions before legal amendments.
Kia is also resuming its negotiations today. The Kia union is demanding a monthly base salary increase of 149,600 won, a performance bonus of 30% of last year's operating profit, the implementation of a 4.5-day workweek, and an extension of the retirement age to 65. Kia and its union have conducted six main negotiations and nine practical discussions without reaching an agreement before the summer break. The Kia union has also secured the right to strike.
Given the significant differences in positions between Hyundai and Kia, it is likely that this year's negotiations will extend beyond the Chuseok holiday. However, as negotiations drag on, the scale of production disruptions and financial losses is expected to grow, which could negatively impact next year's negotiations. Both sides seem to be aware of the need to avoid a worst-case scenario. Kia has concluded its negotiations without disputes for five consecutive years since 2021, and if it can reach an agreement this year without a strike, it may receive special bonuses in addition to performance bonuses, which could significantly influence the sentiments of union members. Therefore, Kia has delegated the authority to refuse overtime work to its branch leaders while keeping the possibility of negotiations open, even after securing the right to strike.
A Hyundai union representative stated, "The unprecedented bonuses in the semiconductor industry have raised the expectations of workers across the entire industry, making it difficult for both sides to find common ground. Many employees feel a sense of relative deprivation, especially since last year the company achieved record results, but the rewards have been concentrated among executives, making it challenging for the union to easily accept the company's proposals."
* This article has been translated by AI.
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