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.
Strike threats add to earnings woes for Korean carmakers
Union workers from Hyundai Motor leave two hours early as part of their partial strike at the carmaker's factory in Ulsan, July 13. Yonhap
By Lee Min-hyung
Kia, Renault edge closer to industrial action amid stalled wage talks
Korean carmakers are facing mounting labor unrest, as stalled wage negotiations raise the risk of widespread strikes that could further undermine their earnings already hit by slowing global demand and lingering tariff pressures from the United States.
Following ongoing walkouts at Hyundai Motor, both Kia and Renault Korea have now secured the legal right to strike after government-led mediation efforts failed.
The prospect of prolonged work stoppages comes as domestic automakers are reporting weaker second-quarter earnings and preparing for summer factory shutdowns.
Additional production disruptions in the third quarter could weigh heavily on carmakers’ profitability and ripple through parts suppliers and logistics companies.
Kia's labor union obtained the legal right to strike on Monday after the National Labor Relations Commission ruled that mediation had failed. If the union proceeds with industrial action, it would end the company's five-year streak of concluding annual wage negotiations without a strike.
The union is demanding a 149,600 won ($102) increase in monthly base pay, a performance bonus equivalent to 30 percent of last year's operating profit and an extension of the retirement age to 65.
It is also seeking shorter working hours, new business initiatives at production facilities and additional hiring.
Renault Korea is also edging closer to a possible strike after 12 rounds of negotiations failed to produce an agreement. The union secured legal strike rights after mediation collapsed last week, and is expected to decide whether to go on a walkout soon.
The union is calling for meaningful wage increases after years of near-frozen salaries, along with a clearer long-term business strategy and stronger employment guarantees.
A Korean national flag flies outside Kia headquarters in Seoul, Friday. Yonhap
Any strike would pose a significant challenge for Renault Korea, whose vehicle sales fell roughly 29 percent in the first half of 2026 from a year earlier, leaving it more vulnerable to production losses than its domestic rivals.
Among Korea's major automakers, Hyundai Motor is the only company that has already launched industrial action. The union is planning another three-day partial strike from Tuesday through Thursday by stopping work for four hours each day. It marks the third round of partial strikes this month.
According to estimates from the industry, the first two rounds of strikes have already resulted in production losses valued at about 670 billion won.
Among the country's major five automakers, General Motors Korea remains the only company to reach a tentative wage agreement. On the key issue of future vehicle allocation, the carmaker's management pledged to make efforts to finalize production plans by the third quarter of 2027.
"Automakers are already grappling with weaker profitability due to U.S. tariff burdens and slowing global demand, so prolonged labor disputes are adding another layer of uncertainty," an industry official said. "If strikes become prolonged, the impact will extend beyond vehicle production to parts suppliers and the broader logistics sector."