Hyundai Motor Company union may stage strike to deny 10 million won pay raise: The DONG-A ILBO

By on July 8, 2021 0

The Hyundai Motor Company union voted 73.8% in favor of a possible strike. Once the National Labor Relations Commission decides that there is a huge gap between union and management positions, a legitimate strike is possible. After reaching collective agreements on wages and working conditions without disputes in 2019 and 2020 due to trade disputes between South Korea and Japan and the COVID-19 pandemic, respectively, the union’s first strike automakers in three years has become likely.

While management proposed to increase an employee’s salary by 11.14 million won by increasing the monthly base salary by 50,000 won, but the union refused, asking to increase the monthly base salary by 99,000 won and pay 30% of the company’s net profits as an incentive to employees. The issue of extending the retirement age is more controversial. As the union calls for an increase in the retirement age to 64 when national pension benefits begin to flow, management says they cannot accept it because the production of electric vehicles, which requires more 30% fewer workers is increasing.


It is true that Hyundai Motor Company’s overseas sales are improving, as consumption in advanced countries explodes after being suppressed by COVID-19 and its new SUV models gain popularity. However, the automaker’s production volume fell by 70,000 units in the first half of this year due to the semiconductor supply shortage for vehicles, which is expected to continue through the first half of the year. next. Popular models have a waiting period of six months or more and stocks at US dealerships are depleted. If a strike goes on now, which is the time that requires peak production, rising company sales may slow.


The union’s demand for an extension of the retirement age cannot avoid criticism for ignoring rapid changes in the auto industry and protecting only the interests of older union members. Major automakers around the world are increasing their investments in electric vehicles and laying off a number of employees. A natural reduction through retirement is the only option in South Korea where layoffs are difficult. Even in the union’s survey, 51 percent voted in favor and 49 percent voted against raising the retirement age, revealing a huge gap between older and younger workers.

According to the Korea Economic Research Institute, 1,000 South Korean workers missed an average of 38.7 days of work per year due to strikes, which is 2.2 times higher than in the UK, 5.4 times higher than in the United States, 5.8 times higher than in Germany and 193.5 times higher than Japan. Moreover, the productivity of Hyundai Motor Company’s factories in South Korea is one of the worst among its factories in different countries. A strike calling for an excessive wage increase under these conditions is difficult to consider legitimate. The extension of the retirement age is a matter of social agreement, which should not be decided by negotiations between workers and the management of a sole proprietorship. Union and management should find common ground during the remaining time.

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