Hyundai Reaches Tentative Deal With Union; Kia Still in Talks

Hyundai management and the Hyundai Branch of the Korea Metal Workers Union reach a tentative labor agreement after months of contentious bargaining and partial strikes over wages and fringe benefits.

“We can confirm that a tentative deal has been reached and that it will be voted on by the union rank and file on Monday (Sept. 9),” Hyundai spokesman Frank Ahrens tells WardsAuto.

Sister-brand Kia has not reached an agreement with its union, but negotiations are continuing, a Kia spokesman says.

No details of the Hyundai agreement have been disclosed, but the deal was struck Thursday, Sept. 5 (Korean time) during the 26th round of negotiations, even as workers were staging partial strikes at the auto maker’s four assembly plants in the country.

Thursday’s strike action brings Hyundai’s estimated production losses since partial strikes began last month to 50,191 units valued at 1.02 trillion won ($934 million), a spokesman says.

The wage and fringe benefits requested by the union basically are the same demands made in last year’s bargaining sessions, including performance bonus payments based on 30% of Hyundai’s prior-year net income.

However, Hyundai in 2012 saw a net income of 9.06 trillion won ($8.2 billion) compared with 8.1 trillion won ($7.4 billion) for 2011, so the pro rata amount would be higher.

The union this year also is asking for a 6.91% increase in the basic monthly wage of 130,496 won ($119), according to a union official. The average basic wage currently is 1.9 million won ($1,730). The company payout to workers is increased substantially by special bonuses, family allowances and other payments.

In 2012 negotiations, the union asked for an 8.4% increase of 151,696 won ($138), but settled for a 5.4% uptick of 98,000 won ($89).

Some Korean media have reported the union is seeking to extend the current college-tuition allowance paid to workers to also cover children who graduate from high school but opt to go directly into the workforce. However, a senior union source tells WardsAuto the latest request is for children who elect to take technical trade training to gain or improve their skills.

Kia has held nine main bargaining sessions, including a meeting Thursday, but union and management negotiators remain hopeful of concluding their talks soon, a spokesman for the auto maker says. “Both the company and the union are working together to get the contract signed before the Chuseok holiday (Sept. 17).”

The union still has scheduled a brace of three 4-hour per-shift (eight hours per day) partial strikes this week, with two held on Monday and Wednesday and a third scheduled for Friday.

The Kia spokesman says production lost to the partial strikes and weekend-work refusals totals 16,373 vehicles valued at 2.9 billion won ($2.7 million).