Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Hyundai Motor’s union criticized over demands for shorter working hours
Hyundai Motor's union members participate in an event to celebrate the start of wage negotiations with management at the carmaker's factory in Ulsan, Thursday. Yonhap
By Lee Min-hyung
Hyundai Motor’s labor union is drawing increasing public criticism for its demands to cut working hours and extend the retirement age, even as the nation’s leading exporter grapples with mounting business uncertainties stemming from U.S. tariffs.
The union initiated this year’s wage negotiations with the carmaker’s management Wednesday.
The union’s demand to introduce a 4.5-day workweek is emerging as a major sticking point, seen as untimely and excessive given fears the company will suffer a sharp decline in annual operating profit due to the 25 percent auto tariff imposed by the U.S.
In addition, the union is urging management to reduce working hours without corresponding wage cuts. It is also demanding the carmaker allocate 30 percent of its net profits to employee incentives. This amounts to around 4 trillion won ($2.95 billion).
Officials from the industry argue that union members should take into consideration the tariff-driven risk factor facing management.
The carmaker is operating in emergency mode to minimize the impact of U.S. tariffs at a time when ongoing negotiations between Korea and the U.S. remain stalled. If the two countries fail to reach a timely consensus, a tariff-induced earnings fall would put continued financial pressure on the Korean carmaker.
“The external risk is a very grave one, which is hard for the carmaker’s management to control, but the union continues to make what is considered an unrealistic demand,” an official from a conglomerate said.
Recent data showed that Hyundai Motor Group topped the list in terms of economic contribution to the local economy last year among major Korean conglomerates. The figure is estimated to have reached 359 trillion won during the same period, up 6 percent from the previous year.
“The carmaker enjoyed its heyday last year on solid exports to the U.S., but it remains unknown whether it will be able to continue the momentum this year due to the tariff risk,” the official said.
The union demands to reduce working hours and extend employees’ retirement age from the current 60 to 64, to align with a campaign pledge from President Lee Jae Myung. The union apparently added the demands to its wage negotiations after the inauguration of the new government administration earlier this month.
Other officials from the industry called the demands premature in that the policy proposals have yet to reach any social consensus.
“Lee’s labor pledge still requires time before it becomes a reality, as the pro-labor policy may end up weakening corporate growth momentum, which will weaken the global competitiveness of major export-reliant companies here, including carmakers,” an auto industry official said.