Hyundai Motor Union Members in South Korea Vote in Favor of Potential Strike
The unionized workers at Hyundai Motor in South Korea have cast their votes, indicating a willingness to engage in a strike if negotiations with the company regarding wage increases and extending the retirement age do not progress. After two months of discussions on these matters, which reached a deadlock last week, the union, which boasts around 44,000 members, disclosed that an overwhelming 88.93% of its members have given the green light for strike action if their demands are not met.
This potential strike would mark the first major such action in five years related to wage negotiations at the South Korean automaker. If the situation escalates to a strike, it could impact the production and delivery of some popular vehicles, which Hyundai has already been grappling with due to ongoing component shortages.
The union is presenting a series of demands, including a minimum basic monthly pay increase of 184,900 won ($139) and a performance pay equivalent to 30% of Hyundai’s net profit from 2022. Furthermore, the union is advocating for an extension of the retirement age from 60 to 64.
An official from the union conveyed that they will continue negotiations with the management at a working level regardless of the voting result. Hyundai Motor has yet to respond to a request for comment from Reuters.
Experts attribute the push to extend the retirement age to South Korea’s rising life expectancy and a relatively weaker social safety net, such as retirement pension, compared to other advanced countries in Europe.
Despite the threat of a strike, analysts suggest that the union is likely to avoid prolonged industrial action due in part to unfavorable public sentiment. The auto industry remains one of the bright spots in South Korea’s economy, and extended disruptions could have a noticeable impact on Hyundai’s operations.
While it’s not anticipated for the strike to be protracted, analysts warn that if it persists for more than three days, which amounts to roughly 10% of Hyundai’s monthly output, it could significantly disrupt the company’s activities.
Following this development, Hyundai Motor’s shares concluded the trading day down by 0.1%, compared to the benchmark KOSPI’s fall of 0.7%.