Hyundai reaches tentative agreement with labor

Hyundai Motor management and union announce that they reached a tentative agreement in this year’s wage talks at the company’s Ulsan plant, Thursday. / Yonhap

By Park Jin-hai

Hyundai Motor has reached a tentative agreement in this year’s wage talks, ending more than six months of negotiations, the company said Thursday.

The agreement is for an 85,000 won increase in base pay, a 300 percent plus 2 million won bonus, and other incentives including a Genesis launching and quality bonus.

The company and union also agreed on an eight-plus-eight-hour daytime shift, one hour less than the present eight-plus-nine-hour system.

Unionists agreed to maintain production by increasing efficiency and reducing break times.

The parties held 33 dialogue sessions since June, but had a hard time in closing the gap in demands.

Along with the wage talks, issues such adopting a peak wage system and expanding the definition of “ordinary wages,” the basis for fixing employees’ benefits, have added to the problems.

During the time, Park Yu-ki, a hard-line former union leader, was elected union head, increasing concern that reaching an agreement would be even more difficult.

The adoption of a new wage system, including the ordinary wage issue, has been postponed until next year’s wage talks.

The peak wage system for all employees has also been put on hold. It will apply only to senior officials, who will receive 10 percent reduced annual wage at age 59 and another 10 percent cut at 60, in exchange for a retirement at 60 guarantee.

The tentative agreement will be finalized though a vote of union members, Dec. 28.

“The sense of crisis that any more strikes would inflict damage to the local economy and subcontractors was understood by management and labor, which led to the agreement,” the company said in a statement.

“The murky global economic outlook following the U.S. interest rate hike and the economic slowdown in China also led the two parties to reach the agreement.”

Because Hyundai Motor has the largest single union, the chances are now high that other affiliates, including Kia Motors and Hyundai Steel, will follow suit.

Hyundai Motor is a barometer of labor-management relations for all affiliates under Hyundai Motor Group.

On the same day, Hyundai Heavy Industries also reached a tentative agreement with its union.

They agreed on a freeze in base pay and a 100 percent bonus increase plus 1.5 million. The tentative agreement will also be finalized Dec.28.