Hyundai, Union Reach Tentative Labor Deal

Hyundai and the Korean Metal Workers Union ink a tentative new labor agreement, with a specific formula for ending night-shift work.

A Hyundai spokesman tells WardsAuto the auto maker has agreed to scrap the troublesome double 10-hour shifts that kept workers on the job throughout the night in favor of two shifts that technically end by midnight.

“The first shift will work from 6:40 a.m. to 3:20 p.m., followed by a second shift which will take over from 3:30 p.m. until 1:10 a.m.,” he says.

The second shift officially ends at midnight, in accord with the union demands, but includes one hour of additional overtime work.

The new 2-shift arrangement would take effect March 4, following a 10-day shakedown of the system in January.

The union has agreed to maintain current production volumes with the revised shift arrangement. Hyundai will invest in additional equipment to attain the higher level of productivity that will be needed.

The two sides agreed to a wage settlement that includes a 98,000 won ($86) increase in monthly pay and a cash bonus of 9.6 million won ($8,463).

Workers also will receive a performance bonus at the end of the year equivalent to five months’ salary, according to the union. The Hyundai spokesman would not confirm the amount.

The union has called partial strikes 12 times since negotiations began July 13, resulting in lost production of 76,723 vehicles, equivalent to 1.59 trillion won ($1.4 billion), the Hyundai spokesman says.

Union officials are boasting to news reporters about ending the night-shift work and obtaining offers for the highest bonuses ever paid to auto workers in Korea.

Security analysts expect the agreement to be ratified when a majority of Hyundai’s 44,000 workers cast votes Monday, Sept. 3.

The Hyundai spokesman would not comment on the current level of vehicle inventories. Analysts in Korea say stocks are at a critically low level that is negatively impacting the sales outlook.

There still remains the touchy issue of converting temporary workers and workers of in-plant subcontractors to regular employee status.

Hyundai had offered to convert 3,000 of 8,000 temporary positions to fulltime jobs by 2015, with 1,000 conversions taking place this year, but the temporary workers union has rejected the offer.

Hyundai management now will meet separately with the temporary workers union on its demands.

Analysts believe the tentative agreement and its ratification will result in a similar offer being made by Kia to the KMWU.

The union and management at GM Korea reached a tentative agreement this month, but it was soundly rejected by workers because it did not contain specific language that would end the night shift. Those negotiations are continuing.

Ssangyong Motor already has settled with its workers. Renault Samsung does not have a labor union and negotiates directly with its own workers committee.