Hyundai, Workers Union Reach Second Wage Deal

Hyundai and the Korean Metal Workers Union reach a second tentative wage agreement Jan. 10, after the company was convinced to add a wafer-thin increment to bonuses previously rejected by union members in December.

The union had rebuffed the previous offer in a Dec. 23 ratification vote by a thin margin of 50.2%. That offer had called for 58,000 won ($54) average monthly pay hike and three months’ pay and 3 million won ($2,800) as bonuses.

The new offer remains the same, except for the one-time cash bonus payout, which has been increased 200,000 won ($187).

The new wage deal includes the same 58,000 won ($54) monthly wage offer, the same three months’ pay hike as a bonus, but the cash bonus of 3 million won ($2,800) has been increased 6.6% to 3.2 million won ($3,000)

The union and management did not meet under cooperative circumstances, and the company was likely pressured to make the new offer under duress of strike action at a time when it needs to roll out new models, according to some analysts.

The union officials returned from the New Year’s holiday on Jan. 2 and ordered workers to strike for four hours on every shift (eight hours total for two shifts daily) on Jan. 4, 5, 8 and 9. They then ratcheted up the partial strikes to six hours per shift beginning Jan. 10. The workers were striking when the negotiating session began that resulted in the tentative agreement.

Despite the agreement being reached during the day shift, workers on the afternoon shift walked off the job for an additional six hours.

The tentative agreement will go to union members for a ratification vote Jan. 15.

The union has taken strike action regarding their current wage demands at least 24 times since negotiations began last spring. It has cost the company more than 84,000 vehicles of lost production valued at 1.8 trillion won ($1.7 billion).

The union reportedly had met 40 times before the tentative deal was reached, although Hyundai management does not divulge details of the meetings that led up to the new agreement.