By Kim Tae-gyu
Hyundai Motor, Korea’s foremost automaker, reached a tentative agreement on Wednesday with the trade union regarding this year’s wage hikes and other benefits.
When a majority of unionists vote for the deal on Friday, the Seoul-based firm will not have seen labor strikes for three years in a row since 2009, following 14 consecutive years of walkouts.
Management and the labor union agreed to raise salaries by 5.41 percent on top of offering bonuses of 7 million won plus, an amount equivalent to three-month salary.
The employees of Korea’s second-largest firm in terms of market capitalization will also get 35 company shares, which would be valued at approximately 6.5 million won.
The two sides managed to seal the deal via overnight marathon negotiations just hours before the deadline when unionists would have voted whether to launch a partial strike.
Hyundai expected that unionists are highly likely to accept the deal.
“Ever since the labor union was established in 1987, it has staged strikes every year through 2008 with the sole exception of 1994. But things have changed in 2009 and beyond,” a Hyundai official said.
“We had a set of thorny issues on the table including the so-called time-off rule. Yet both management and labor understood that strikes cannot be an answer based on trust of each other. We think that the two sides have set up a win-win formula.”
In tandem with the time-off system, which went into effect last year banning the number of full-time paid unionists, the Hyundai Motor union plans to more than halve the number of full-timers to 111 from the current 237.
Among them, the firm will pay 26 while union dues will cover the remaining 85.
Hyundai’s sister company Kia Motors, whose trade union has been regarded as being as militant as that of Hyundai, also successfully agreed on wage deals late last month.
The agreement marked the company’s second straight year of a wage deal without union strikes.
Since 1991, Kia had suffered walkouts for 19 years in a row up to 2009, but its employees did not resort to any strike action last year for the first time in almost two decades.
“In the past, the downside of Hyundai and Kia was their aggressive unions, which tended to go on strike during the summer seasons to generate financial damage,” a Seoul analyst said.
“But things seem to have changed of late. The peaceful relationship between management and labor will help the two firms improve.”
The stock market also responded in a positive manner to the news as Hyundai Motor shares rose 1.96 percent to 181,500 won even though the benchmark KOSPI slid due to the cut in Japan’s credit rating.