Hyundai Motor wraps up wage talks

By Kim Da-ye

Staff reporter

Hyundai Motor said Wednesday that it reached an agreement on a wage increase with its labor union without a dispute. If 45,000 union members vote in favor of the accord, it would mark the first two-consecutive years of wage settlement without strikes in more than a decade.

Korea’s largest car maker and its union agreed to raise the basic salary by 79,000 won ($65) after the 13th meeting of the negotiations that started on June 14. Both parties met in Ulsan, where the car plant is located.

Other terms of the agreement include a bonus payment equivalent to three months’ wages plus 5 million won. Each employee will also be awarded 30 Hyundai Motor shares which closed at 133,500 won on Thursday.

The union initially demanded a uniform wage increase of 130,730 won ($109) as well as a fixed bonus payment of 30 percent of net profits while the auto giant had insisted on a wage hike by 68,000 won from its first meeting to the eleventh.

In an interview with The Korea Times, union spokesman Chang Kyu-ho said that one of the most important outcomes of the negotiation other than the wage increase is the automaker’s promise to produce at least 1.72 million vehicles in Korea. The automaker has increasingly moved its operation off of domestic turf to meet the global demand for its cars.

“The guarantee of 1.72 million vehicles being produced in Korea means part of the profit will go to domestic employees, helping improve job security,” said Chang.

“We both agreed that the company and its union should work together for the better future of the company,” a Hyundai Motor official said in a statement. “We are on the same page that we should have a world-class competitive edge through boosting productivity and quality.”

According to the automaker’s data, the labor union had gone on strike nearly every year, affecting the production of more than 1.12 million cars and resulting in a loss of 11.6 trillion won, since the union’s establishment in 1987.

Chang said that the union made efforts to reach an agreement without striking because they wanted to make history by doing so for two years in a row. In the meantime, the union’s leader Lee Kyung-hoon, who has been praise for his “win-win approach” rather than a militant attitude, wrote in a newsletter, “Despite tough conditions, as it has been promised, we did better than Hyundai Heavy Industries this year.”

Many members in the union are said to compare often the wage increase by Hyundai Heavy Industries to that of Hyundai Motor. This year, the former increased the basic salary by 71,050 won ― 7,950 won less than that of its auto counterpart.