Hyundai Motor stuck in temps’ strike

By Kim Da-ye, Bae Ji-sook

Temporary workers at Hyundai Motor’s assembly lines in Ulsan have been on strike since Nov. 15, demanding they be put on the permanent payroll.

After a worker set himself on fire in protest, the Korea Metal Workers’ Union (KMWU), the umbrella labor union to which the union of Hyundai’s permanent employees belongs to, declared that it would go on a nationwide strike in early December, if the automaker didn’t start negotiations with temporary workers by the end of the month.

The country’s largest automaker had already lost 90.3 billion as of Sunday, and has sued 27 workers that are leading the strike because collective action for permanent employment is prohibited by the Labor Law.

But the deepest fear for the costly, restrictive outcomes of any negotiations with temporary workers doesn’t lie just within Hyundai Motors, but also within many of the large manufacturers which have been increasingly relying on temporary employees ― specifically contract workers.

The story goes back the Supreme Court’s July 22 ruling in favor of a non-regular worker at the automaker to be recognized as a regular employee.

Since the ruling, the temporary workers at the Hyundai plant have been strengthening their demands. A seat-making subcontractor, whose employees were the most aggressive, closed down its operations. The workers believe that Hyundai had forced it to close the company down.

In protest, the workers have occupied one of the assembly lines at Hyundai’s Ulsan plant.

The occupied assembly line is for the newly unveiled Accent, making it difficult to produce the sedans for which pre-orders have been received.

The automaker has a limited scope of action. Hyundai has about 8,200 contract workers ― 22 percent of its total staff. Any concession in this particular case will lead to the wholesale conversion of the workers’ status, which would cost the firm nearly 260 billion won in additional wages.

The greater hidden cost would be losing flexibility in hiring and managing the work force while Hyundai already has a notoriously demanding labor union.

Hyundai is now competing against global players including Toyota, whose temporary workers account for about 20 percent of the firm’s work force.

Meanwhile, any general strike would be the first collective action by the Korean Confederation of Trade Unions (KCTU), the hawkish umbrella group, since 2007, when it opposed the government’s signing of a free trade agreement with the U.S. The moves will also affect unionists in other industries, which have refrained from taking collective action since the conservative Lee Myung-bak administration took office in 2008.

According to the KCTU, over 75 percent of the 401 chapters of the KMWU decided to stage a general strike next month if Hyundai insists on “suppressing” its members who are already on strike inside the automaker’s Ulsan plant.

Other manufacturers now fear that Hyundai’s problem could spill over. On Monday, five business associations including the pro-corporate Federation of Korean Industries called for the strike to end and the government to intervene.

A 2009 survey by the Ministry of Employment and Labor showed that 21.9 percent of employees at 963 workplaces that hire more than 300 people were contract workers. Shipbuilders hire the most contract workers with 55 percent belonging to subcontractors. More than 41 percent of the workforce at large steel makers were contract workers while they accounted for 14.5 percent at carmakers.

A policy paper published by the Ministry of Employment and Labor in 2007 said that hiring contract workers became popular because it saved labor costs and provided flexibility to firms in hiring and firing employees. At the same time, the paper points out lax rules against manufacturers that are found to have illegally hired agency workers as one of the causes for complaint.

“There were cases that the labor ministry identified as illegal hiring of agency workers, but were later ruled as legal by prosecutors,” the policy paper said. “The court has also been generous to the guilty firms, imposing fines worth only 500,000 won to 5 million won. We believe the companies, even when they are found to have illegally hired agency workers, didn’t feel much of a burden.”