Hyundai Sues Union for Lost Output Due to Walkouts

Hyundai Motor Co. Ltd. is suing labor union officials who organized two wildcat walkouts last week at one of the auto maker’s plants in Ulsan, South Korea.

The striking workers were demanding Hyundai pay them a stipulated amount of overtime even though the plant is not on an overtime schedule.

The union officials are being sued for 1.1 billion won ($1.2 million) to compensate Hyundai for lost production on March 3-4, a company spokesman tells Ward’s.

“Plant 1 produces the Verna and Getz small cars, and demand is not high enough to warrant overtime,” he says. “Still, the workers went on strike, demanding to receive two hours overtime pay on weekdays and two full days of weekend overtime pay every month.”

The striking Plant 1 workers are seeking parity with Plant 3 employees, who build the hot-selling Elantra and i30 models. But where Plant 1 has a substantial inventory of unsold cars, there is an order backlog for the vehicles produced at Plant 3, with customers complaining of long waits.

“But we can’t rationalize the work load between the plants,” the spokesman says. “The company can’t get the labor union to agree to do this.”

Long customer wait for new Hyundai i30.

The union’s unwillingness to cooperate in rationalizing production is a significant problem that is impeding productivity, he adds.

Hyundai experienced a similar problem last year, when it tried to move some Sonata production to Ulsan’s Plant 1, as the Asan factory, where the Sonata is built, was hard pressed to keep up with demand for the midsize sedan. But the union balked.

“We have different unions at Asan and Ulsan, and they refused to let us bring the Sonata into Plant 1,” the spokesman says. “They think rationalization of production to reduce customer wait times will cut into worker overtime.”

The Asan plant still has a big backlog of orders for the Sonata, he says, and customers are facing a significant wait for deliveries.