SEOUL (Reuters) – Hyundai Motor Co on Monday reached a tentative wage deal with its South Korean labor union, a union spokesman said, potentially resolving disputes that had dragged on longer than expected and led to partial strikes.
The agreement is subject to approval by union members in a vote on Wednesday.
If approved, Monday’s agreement will put an end to stoppages by 47,000 unionized workers in South Korea that have this year prevented production of about 16,500 vehicles worth 330.2 billion Korean won ($313.5 million).
Hyundai, the world’s fifth-biggest automaker alongside with Kia Motors, has been hit by strikes in all but four years of its South Korean union’s 27-year history.
The union resumed a partial strike last week after Hyundai Motor, Kia Motors and Hyundai Mobis bid $10 billion for a plot of land in Seoul, more than three times its appraised value.
The consortium led by Hyundai Motor plans to use the land in the high-end Gangnam district to build a headquarters and automotive theme park. Its winning bid sent shares in the companies plunging.
Since annual wage talks kicked off in early June, Hyundai Motor and its labour union had locked horns over recalculating base wages to include bonuses, a change the automaker said would increase labour costs. Hyundai and the union delayed their agreement on base wages by March next year.
The latest wage deal includes bonuses and incentives totaling 8.9 million won, plus payments equivalent to four and a half months’ salary and a rise of 98,000 won in basic salaries.
Recurring labour disputes, high wages at home and a strong local currency are expected to put further pressure on the automaker to accelerate overseas production. Hyundai made 62 percent of its cars last year overseas, up from 20 percent in 2004.
Hyundai Motor shares ended up 1.3 percent at 189,500 Korean won each prior to the wage deal, rebounding from losses made last week after the property bid.
(1 US dollar = 1,053.1500 Korean won)
(Reporting by Hyunjoo Jin; Editing by David Holmes)
- Labor Issues
- Hyundai Motor
- Hyundai Mobis