Neither Side Yielding as Hyundai Workers Strike

Both sides dig in as Hyundai Motor workers launch partial strikes, rejecting the automaker’s claims it cannot meet its wage demands.

Workers represented by the Korea Metal Workers Union on Wednesday walked out on the first four hours of both the scheduled 8-hour day and afternoon shifts Hyundai’s three plants in Korea, then refused to work for the first six hours of the day and afternoon shifts Thursday, causing 12 hours of production losses.

Day-shift workers also walked out for six hours Friday; no afternoon shift was scheduled because of the start of Korea’s Chuseok Thanksgiving holiday weekend.

While Hyundai has lost between 9,000 and 10,000 units of production during the 26 hours of downtime, work has continued at Kia Motors plants, but workers at the Hyundai affiliate also may strike.

It is the fourth labor action in as many years for Hyundai, which combined with Kia rank No.5 in global vehicle production.

KMWU spokesmen say union leaders will meet after the national holiday on Oct. 1 to determine what further course of action to take.

The KMWU rebuffs Hyundai’s claim it cannot afford to meet its demands for a 159,900-won ($133) monthly wage increase and 30% of 2014 net profits. The union cites this week’s final payment by Hyundai, Kia and Hyundai Mobis, another Hyundai Group affiliate, on the acquisition of a 10.6 trillion won ($8.8 billion) property in Seoul’s upscale Gangnam district which will be the site of Hyundai Motor Group’s new headquarters.

Analysts estimate the last payment at about 3.6 trillion won ($3 billion), some 2 trillion won ($1.7 billion) of which is being paid by Hyundai, which holds a 55% stake in the deal.

Kia is paying 720 billion won ($600 million) toward the final installment. Auto-parts maker Hyundai Mobis is making a final payment of 900 billion won ($751 million).

Even with losing more than a full day of production, Hyundai management continues to offer just half of the KMWU’s monthly wage-increase demand. The union says company negotiators led by Yoon Gap-han, Hyundai president in charge of plants and production, insists on adoption of a wage-peak system that would reduce worker pay 10% when they reach age 59 and extend the retirement age from 58 to 60.

The union wants all workers to stay employed through age 65 and says Hyundai’s wage-reduction plan is unacceptable.

Unionists also note Chung Eui-sun, Hyundai Group vice chairman and son of Chairman Chung Mong-koo filed papers that disclosed he had personally acquired nearly 1.4% of Hyundai Motor common stock for 500 billion won ($417 million) in a private post-market-hours purchase from Hyundai Heavy Industries. The flashing of such a huge amount of personal funds by the 44-year-old younger Chung has inflamed rank-and-file unionists.

Past negotiations routinely have been antagonistic before an eleventh-hour compromise was reached in the week before Chuseok, with workers beginning their holiday knowing a signing- bonus check was heading their way. Apparently not so this year.