Hyundai hobbled by demands for job guarantees

Hyundai Motor Co. Ltd. may be enjoying record export sales in the U.S. and Korea and record high profit figures, too, but the company's production operations recently were hamstrung by union walkouts that gave executives the jitters and cost the company millions.

While workers recently called off the strike after agreeing with management on wage increases, Hyundai reportedly lost $577 million in sales due to the strike, while Hyundai suppliers lost $402 million. After three weeks of disruptions, the plants have resumed operations.

The crux of the problem was the union's quest for absolute job guarantees, meaning no worker redundancies or reductions, no layoffs and a guaranteed income, a Hyundai spokesperson said at the time. Incentives of as much as 30% of the company's 2001 profits also were part of the union demands, as well as extra bonuses equivalent to three months salary.

The disruption comes at a time when Hyundai and its subsidiary, Kia Motors Corp., are contemplating plans for increasing productivity across the board. This includes increased use of robots and automation in existing plants and significant workforce restructuring but not necessarily worker layoffs.

Nevertheless, company officials said the union demands were excessive. “While we're operating flat out at present, we simply can't commit to that sort of guarantee because nobody knows what the future will hold,” the spokesman told WAW at the time.

The strikes began on Nov. 29 at Hyundai's main car, engine and parts complex in Ulsan; its commercial vehicle plant in Jeonju, site of the new Hyundai-Mercedes-Benz diesel engine plant; and a car plant in Asan.

“These tactics have caused disruptions, and we can't deny that they're impacting our export schedules,” the spokesperson noted. “We don't see a speedy resolution to this situation, although we are trying very hard to find a way to normalize our schedules.” Although an agreement was reached, no details were available at press time.