Hyundai’s Union Threatens Walkout

Hyundai Motor’s union has called for a strike vote on Wednesday, July 13, abandoning talks after declaring wage negotiations being held with management have broken down completely.

The Korean Metal Workers Union website says its negotiators have run out of patience due to the lack of progress and management intransigence in a series of sessions held in Ulsan, the base for most of Hyundai’s domestic manufacturing capability.

Among union demands are a 152,000 won ($130) average monthly wage increase and the perennial request for distributing 30% of the previous year’s net profits among the workers as bonuses.

The automaker has expressed regret over the decision to halt negotiations and says the union pulled out of the talks when there was still room to reach an agreement.

If a majority of the unionized voters cast ballots calling for a strike it does not mean there will be an automatic shutdown of production. However, it will give the union the legal basis to call for a strike under Korean law, although the situation also must be reviewed by government arbitrators before there are any work stoppages.

The union also publicly announced July 5 it is seeking a coordinating alliance with the workers union at Hyundai Heavy Industries so that both unions can strike at the same time.

Although shipbuilder HHI is not part of the Hyundai Motor Group, its production facilities all are located in Ulsan, where Hyundai operates five major vehicle assembly lines.

The KMWU is part of the umbrella Korean Confederation of Trade Unions, which appears to be coordinating things with the independent HHI labor union.

The intention of the two unions to strike at the same time has been known since mid-June.

On June 16, Park Yoo-ki, president of the Hyundai Motor union, released a statement saying walkouts would be made in conjunction with the HHI union if wage negotiations with Hyundai Motor spilled over into July.

On the same day, the HHI union issued a statement saying it would strike in unison with Hyundai Motor’s union if its wage and working condition demands were not met by July.

KCTU representatives in Ulsan followed with a news conference to announce the umbrella union would do everything possible to support the HHI workers and protect them from a company restructuring plan that would lead to job losses.

This is the second time Hyundai Motor’s union has said talks with management have broken down. On June 27, the union said negotiations with management representatives of several companies within the Hyundai Motor Group, including Hyundai Motor, had hit a roadblock and that a strike would be held on July 22.

At that time, the union had been trying to negotiate with several of the affiliated Hyundai Motor Group companies simultaneously. The union says six rounds of negotiations were held on a group basis, but that companies had refused to hold a seventh round.

The July 22 strike would be held not just against Hyundai Motor but all of the major affiliates in the group, including such vital suppliers as Hyundai Mobis and Hyundai Wia, union sources said at the time. It is not clear whether that remains the plan.

One union demand during the group-wide negotiating sessions called for the formation of a joint union-management committee for planning the future of Korea’s automotive, steel and rail industries. Hyundai Motor Group companies are heavily involved in all of those industries:

Hyundai Motor and Kia Motors collectively are the fifth largest automaker in the world on the basis of vehicle sales.

Hyundai Steel and its affiliated steel companies constitute the world’s fifth-largest producer of steel. Hyundai Rotem is one of the world’s largest producers of railroad rolling stock.