[Yonhap Photo]
SEOUL -- Workers at South Korea's top carmaker Hyundai Motor endorsed a modest wage deal between union leaders and management, agreeing to stop the disruption of car production in an unusually quick manner that reflected widespread concerns about trade protectionism abroad and slow sales.
Hyundai said that 63.4 percent of 42,046 unionized workers who participated in a vote Thursday approved the deal that included a basic wage increase of 45,000 won ($40), bonuses, the adjustment of work shifts to reduce working hours and the creation of a 50 billion-won fund to support subcontractors.
The most contentious issue was not solved. Workers have opposed a proposed 53 billion won investment in a joint venture with the Gwangju city government to assemble compact SUVs with one-liter engines under an original equipment manufacturing (OEM) contract. Hyundai's union insists the auto group does not need extra production facilities.
Frequent strikes, excessive demands and intervention in management have hurt the competitiveness of the world's fifth-largest auto group, contributing to low productivity. In the first half of this year, Hyundai's net profit slumped 34 percent to 1.54 trillion won. Operating income declined 37 percent on-year to 1.63 trillion won and sales fell 1.1 percent to 47.25 trillion won.
In a message to shareholders in May, Hyundai Motor president Lee Won-hee warned the auto group is in crisis due to tough competition in the global market and challenges from carmakers in China and other emerging countries.
The United States has threatened to impose tariffs on imported autos. Out of 2.53 million Korean vehicles sold abroad last year, 33 percent were shipped to the U.S. market, according to data compiled by the Korea Automobile Manufacturers Association. Hyundai and Kia run factories in Alabama and Georgia.
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