Union Quits Hyundai Talks, Sets July 11 Strike Vote

SEOUL – Labor negotiations between Hyundai and the union representing 38,000 of the Korean auto maker’s employees have broken down, setting the stage for a July 11 strike vote.

Hyundai Motor Workers Union representatives walked out of the Thursday, June 28, bargaining session, saying Hyundai refused to come up with an acceptable plan for meeting their terms.

The move came one day after stock prices for all Hyundai Motor Group companies dropped sharply amid word the union was considering breaking off the talks.

Union demands for higher wages and changes in work rules are being complicated by the auto maker’s resistance to converting an estimated 10,000 in-plant employees of subcontractors to regular worker status.

Korean labor laws no longer allow a company to negotiate only with one union representing a majority of its employees. A company now must bargain with all of the union organizations to which its employees may belong – in some cases, with several at the same time.

Hyundai, its Kia affiliate and General Motors Korea all have unions in place that represent temporary and in-house contract supplier workers. Union sources say those employees’ wages are about 60% of those paid to regular workers, and they do not have fringe benefits.

While Hyundai now has three strike-free years behind it, workers in November ousted a moderate president and elected a more militant unionist. Analysts say that as a result, the union's direction has become unpredictable.

For instance, just days after voting in the new union leadership, weekend-shift workers put down their tools so they could participate in a Seoul rally decrying the impending U.S.-Korea Free Trade Agreement.

Analysts noted the shutdown had nothing to do with worker relations or working agreements in any Hyundai plants, and no unionized workers from any of the other Korean auto makers joined the demonstration.

The Korean Metal Workers Union, the umbrella group for worker unions at all of Korea’s car companies, is voicing the Hyundai employees’ demands. Besides setting uniform goals for compensation and workplace conditions, the KMWU also is demanding full-time employee status for all part-time workers and in-house contracted workers.

About one-quarter of Hyundai’s plant workers are not on the auto maker’s payroll, but instead are employed by in-plant parts and systems suppliers.

Union officials say they are inflexible on the issue, but Hyundai is concerned not only about the immediate financial outlays but also about losing its ability to shift workers from one plant or location to another as production requirements change.

The dispute is not new. Last November, 1,941 contract workers filed a joint lawsuit against Hyundai, asking the court to force the auto maker to designate them as full-time employees and compensate them for being underpaid.

Hyundai announced earlier this month it would grant “direct temporary worker” status to 1,500 in-house subcontract workers. The union representing Hyundai temporary employees complained that, as direct temporary workers, the subcontract workers would have no protection against sudden terminations.

The auto maker filed an immediate appeal when the Supreme Court of Korea ruled this year that an in-house contract worker fired seven years earlier for demanding full-time status must be reclassified as a full-time Hyundai employee.

The court found that the worker was a de facto full-time employee in that he had worked for more than two years alongside regular full-time employees and took his instructions from Hyundai foremen and managers.

At that time, the law held that employees of subcontractors who worked in a plant for two years or more should be considered direct employees of the company that operated the plant. The law since has been amended and as of this August, the 2-year qualification no longer applies to any in-house subcontractor employee, regardless of tenure.

Non-full-time workers shut down Hyundai plants in Ulsan last year and again this year. After those employees halted their strike in 2011, Hyundai quickly filed suits against them for damages caused by lost production.

Police also obtained arrest warrants for several of the workers who organized the strike, citing them on charges including illegal work stoppage and illegal occupation of Hyundai property.

The walkout by union negotiators that has halted the Hyundai talks comes while South Korea already is reeling with labor strife.

Unionized truck drivers on Friday ended a 5-day nationwide strike that had threatened shipping at export-dependent Korea’s major ports. On Wednesday, the Korean Construction Workers Union also launched a nationwide strike.

Both the trucker and construction worker unions belong to the KMWU, which is a major contingent of the Korea Confederation of Trade Unions. The KCTU on Thursday held a rally with 30,000 unionists on Seoul’s Youido Island, the seat of Korea's financial district, demanding an end to the nonregular worker system.

The KCTU is the country’s largest union organization. It also is the umbrella organization for the KMWU, which represents workers at all five of Korea’s auto makers.

KCTU officials said during the Thursday rally that the labor coalition would call for general strikes in July and August by all of its constituent unions.