Hyundai Strike Testing Korean Government’s Patience

The Hyundai branch of the Korean Metal Workers Union is under pressure from the Korean government – which is threatening intervention – to end strikes that have been crippling production at the automaker’s domestic assembly plants for the past eight weeks.

That pressure prompted union negotiators to meet Tuesday and Wednesday with management after workers walked out for a full day Monday, according to a union source.

Partial strikes were held both Tuesday and Wednesday at all seven assembly plants but were reduced from six hours per day to four. The reduction in strike time from three to two hours per shift will continue every day union and management teams meet, according to information on the union’s website.

Cabinet ministers meeting Wednesday in an emergency session in Seoul announced they may issue a mediation order requiring the union to immediately stop the walkouts, a legal intervention that has not been applied in the automotive industry in 23 years.

The buildup to the cabinet meeting and threat of government intervention began Monday with the first daylong strike against Hyundai in 12 years. It followed a string of partial walkouts that began in mid-July.

Minister of Trade, Industry and Energy Joo Hyung-hwan has condemned the strike, saying it would further impede Korea’s weak overall export growth of 3% by value in August.

“While domestic consumption is going through a correction, industrial output and exports are expected to decline again,” Minister of Trade and Finance Yoo Il-ho adds. He attributes much of the decline to union strike action.

“This group selfishness has gone too far and the striking factions will not be able to escape the public’s scorn,” Yoo says.

Demonstrators from the metal workers union’s Hyundai and Kia branches were joined Wednesday by striking unionists from shipbuilding companies and railway workers in a huge protest in Seoul.

The combined union groups rallied at the ruling Saneuri Party headquarters in Seoul, protesting the government’s instructions to all industries to replace current seniority-based wage systems with a performance-based system tied to worker productivity.

Hyundai has issued no statement following the government’s possible order of an end to the strikes.

Also Wednesday the Korea Automobile Manufacturers Assn. issued a report stating Korea’s automakers now produce more vehicles overseas than they do in their domestic plants.

The trade group partly attributes this to the high cost of labor and frequent strikes that make it economically more attractive to produce vehicles abroad instead of export them from Korea.

The report notes Korea’s five automakers produced 2.77 million vehicles at home in the first eight months of 2016. However, Hyundai and affiliate Kia plants in overseas markets produced 2.92 million vehicles in the same period.

The country’s other three automakers, GM Korea, Renault Samsung and Ssangyong Motors, do not operate overseas production plants.