The five major domestic automakers are set to conclude this year's wage and collective bargaining negotiations by the end of August, following a vote on the Hyundai Motor and Kia agreement. This year's negotiations took a record 121 days, about 30 days longer than last year, with strike hours increasing to 86, nearly ten times the previous year's total of 8 hours. Unlike last year, this year's focus shifted from wage increases to job security. With the strike risks now behind them, all five companies are expected to ramp up production in the second half of the year.
According to a report by Aju Economy on August 27, Renault Korea took the longest time to reach an agreement, starting its first meeting on April 27 and concluding negotiations on August 26, totaling 121 days. The agreement includes a basic salary increase of 51,000 won and a variable productivity incentive of up to 100% plus 2.5 million won, with a support rate of 50.1%.
Although the negotiation period was about 30 days longer than last year, the increase in basic salary was reduced by 50% compared to the previous year, and the productivity incentive increase was also lower than last year. Instead of focusing on wage increases, the management and labor agreed to prioritize securing production volumes at the Busan plant and job stability. A Renault Korea official stated, "With the agreement reached, we will focus on overcoming the difficult business situation and the success of new projects."
Hyundai Motor also took 111 days to reach a tentative agreement after starting its first labor-management meeting at the Ulsan plant on May 6, which is 24 days longer than last year's 83 days. The tentative agreement includes a basic salary increase of 100,000 won and a performance bonus of 400% plus 12.7 million won. Notably, the company experienced its first total strike in ten years, accumulating 60 hours of strike time, nearly 9.8 times the previous year's total of 8 hours. Production disruptions affected approximately 55,200 vehicles, leading to an estimated revenue loss of 2.5 trillion won.
Kia managed to conduct its negotiations without strikes for six consecutive years, but the negotiation period increased to 82 days, 38 days longer than last year. GM Korea and Korean GM reached agreements in 61 days and 56 days, respectively, making them the fastest among the five companies.
This year's wage negotiations shifted the focus from competition over wage increases to job security amid the transition to future vehicles. All five companies fought longer than last year, yet the overall compensation packages were reduced. For instance, Hyundai's performance bonus decreased from 450% plus 15.8 million won last year to 400% plus 12.7 million won this year. Instead, non-wage benefits such as new hiring, job security, and domestic production volume guarantees were strengthened.
With the risks from the negotiations resolved, the industry is tightening its production efforts once again. The five automakers sold 670,191 vehicles last month, a 3.5% increase compared to the same month last year. However, sales for three of the companies, excluding Kia (13.4%) and Korean GM (30.6%), saw significant declines. Hyundai's sales dropped by 5.1% due to production disruptions from the strike, while Korean GM and Renault Korea experienced decreases of 11.1% and 58.2%, respectively.
* This article has been translated by AI.
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