SEOUL, (Reuters) – Hyundai Motor’s unionised workers in South Korea voted for possible strike action after talks with the company over wage increases and an extension of the retirement age stalled, the automaker’s union said on Monday.
The union, one of the biggest in the country with more than 43,000 members, said that almost 90% of its members had approved strike action unless the company accepts the union’s demands.
A strike would mark the first such action in six years related to wage negotiations at the South Korean carmaker and could disrupt production of some popular vehicles at home, which Hyundai has been exporting to offset its sluggish domestic sales.
“We are open to have negotiations with the management if they are willing to change their stance,” a Hyundai Motor union official told Reuters, adding that the union plans to carry out working-level talks with the management. The union and the management had a total of eight rounds of wage negotiations up to mid-June.
Hyundai Motor declined to comment.
Analysts said it is still too early to tell whether or not the union would actually launch a strike this year, but if a strike takes place it would inevitably impact Hyundai’s short-term sales, especially for the popular cars sold in the United States, Hyundai’s biggest revenue-generating market.
Analysts added that Hyundai Motor’s management could use the automaker’s new U.S. plant, its largest investment outside South Korea, as bargaining leverage because it could help reduce Hyundai’s dependence on domestic production.
The union is seeking a minimum basic monthly pay increase of 159,800 won ($115.14) and performance pay equating to 30% of Hyundai’s 2023 net profit. It is also demanding an increase in the retirement age to 64 from 60, as South Korea’s rising life expectancy and inadequate retirement pension payments prompt demands to be able to work for longer.
“Hyundai Motor’s union at home has always voted for strike action every year and this year is no different, however, the union might push a bit harder than previous years as the company has been doing well and the pandemic is long gone, so workers would like to push for bigger compensation this time,” said Chang Moonsu, an analyst at Hyundai Motor Securities.
While production disruptions at Hyundai’s domestic factories would be inevitable, management would encourage workers not participating in the strike to work overtime to minimize the impact, Chang added.
($1 = 1,387.9200 won)
Reporting by Heekyong Yang Editing by Louise Heavens, David Goodman and Susan Fenton
