Hyundai Workers Out for Seventh Straight Weekend

Unionized workers at Hyundai refuse to work for a seventh consecutive weekend in South Korea, resulting in significant production losses for both auto makers.

A Hyundai spokesman tells WardsAuto management and the union are much closer to agreement on a weekend compensation package than when the union first refused weekend work March 9. “We are in talks with the union to reach the best results as soon as possible,” he says.

However, Hyundai so far has lost six days of production, adding up to 41,000 units valued at 820 billion won ($732 million).

Under the shift-work system that had been in place at Hyundai for decades, workers put in a single 14-hour shift on weekends that began on Friday night and ended on Sunday morning. Management wants to replace the long single shift with an 8-hour day shift and a 9-hour afternoon shift, the same way regular weekday work is structured, the spokesman says.

That is acceptable to the union workers, who have demanded an end to the late-night and overnight work for the past decade. However, they want the same compensation for work done on the shorter shifts that they would receive under the old system.

“Previously, the weekend holiday work-shift arrangement at Hyundai was 0/14, which means there is no daytime shift and the night shift works 14 hours straight, from 5 p.m. Saturday to Sunday morning,” a source with the Korea Metal Workers Union tells WardsAuto.

“This arrangement gave workers great benefits, because workers got holiday work premiums plus midnight work premiums during the extremely long holiday work shift.”

After enacting the daytime (8- and 9-hour) back-to-back shift system in March, management asked the union to agree on the addition of one more shift to the holiday weekend work schedule. But workers would be limited to a single 8-hour shift “for the lucrative holiday work,” the source says.

“So the union proposed an alternative plan to compensate the loss of holiday work wages: Increase line speed and create an additional allowance to compensate for the pay losses.”

Hyundai is offering workers 420,000 won ($375) per weekend shift, while the union is demanding 470,000 won ($420). Securities analysts following the dispute believe the $45 difference is formidable and Hyundai will not want to concede much more.

The Hyundai spokesman refutes media reports the weekend work stoppages are resulting in severe supply problems in the U.S. and other overseas markets. “The impact on our exports has been minimal.”

Analysts note the effect of the production slowdown has been moderated because both auto makers’ domestic sales are weakening.

The dispute has extended to Hyundai affiliate Kia, but to a lesser extent. Kia workers have refused to work on weekends since March 5 except for those at the Gwangju plant, who returned March 16.

A spokesman contacted by WardsAuto declines to provide production-loss statistics, but says they have been less serious than Hyundai’s.

“Our Gwangju plant, having a larger portion of the overtime demand, has conducted weekend operations since March 16, so our loss has not been that significant.”

Kia operates with a different weekend-shift arrangement than Hyundai, which varies from plant to plant, the spokesman noted.

Hyundai and Kia begin negotiating a new collective-bargaining agreement with their worker unions this month. Analysts say the weekend work compensation issue will complicate the talks.