Hyundai Motor Co. Ltd.’s labor union has called off demonstration strikes planned for this week because union dissidents prevented the auto maker from presenting its sweetened collective-bargaining agreement.

The dissidents physically blocked a building in Ulsan, South Korea, where Hyundai negotiators were scheduled to deliver their new proposal to the union in an Aug.19 meeting.

“Management was virtually assured Tuesday that our improved proposal would be accepted and that there would be a breakthrough and we would make a deal,” a Hyundai source tells Ward’s.

“The union generally had approved our new ‘double-day’ work-shift offer but on Monday asked us to improve the wage and bonus offer. However, some union negotiators objected to the timing of the new work-shift program and prevented the two sides from meeting on Tuesday night.”

Because of the break within its own negotiating team, the union has suspended further talks while it tries to reach internal agreement on the timing for implementing the proposed work-shift program.

The union in a statement says it will not hold any demonstration strikes because Hyundai attempted to meet in good faith.

The dissidents are demanding the new work-shift program begin Jan.1, while the majority of union negotiators have agreed to management’s proposal to implement the program sometime later in 2009 to allow Hyundai to offset any production losses.

Hyundai is proposing an 8-hour early day shift followed by a 9-hour afternoon shift. This would replace the current two 10-hour shift and reduce production time by three hours each day.

“Most union representatives understand we need to further study the impact of the 2-shift system and develop new ways to offset production shortfalls caused from losing three hours of work each day,” the source says.

The dissident minority is demanding Hyundai abide by a schedule for implementing the program that was first introduced during contract negotiations held in 2005.

“There had been no detailed discussion in those earlier talks in 2005,” the source says. “Management had only expressed a general willingness to find ways to eliminate the graveyard shift and set up a double-day shift program, with a ballpark target date of around Jan.1.”

Despite the break in negotiations, Hyundai says it remains optimistic an agreement will be reached once the union irons out its differences.