Hyundai Motor, at a Crossroads for This Year's Wage and Collective Agreement... Kia Enters Strike Procedure

[Financial News] Attention is focused on whether the Hyundai Motor union, which even conducted a partial strike this year, will agree on the wage and collective agreement. This is because the outcome of the agreement by Hyundai, which is considered the 'elder brother,' could significantly impact ongoing negotiations in the industry, including Kia.
However, the fact that there are differing opinions on this agreement within Hyundai is a variable. Meanwhile, the Kia union is raising the pressure by discussing the formation of a strike committee and taking steps towards a strike.
The Hyundai Motor union conducted a vote from 6 a.m. on the 15th at all workplaces nationwide, including Ulsan, Jeonju, Asan plants, and Namyang Research Center, targeting all 42,000 union members. The voting ended at 11:30 a.m., but the results will be announced on the 16th.
Previously, on the 9th, labor and management reached a tentative agreement that included a basic salary increase of 100,000 won, a performance bonus of 450%, a lump sum payment of 15.8 million won, and the issuance of 200,000 won in traditional market gift certificates and 30 shares. However, the extension of the retirement age, which the union had demanded, was not included in this agreement.
It is understood that there is dissatisfaction within Hyundai regarding this tentative agreement. This is because, despite the company recording its highest sales ever last year, the increase in basic salary and performance bonus has actually decreased compared to the previous year.
If the tentative agreement is rejected, labor and management must renegotiate to reach a new agreement. In the past, in 2016 and 2017, there were cases where the first tentative agreement was rejected due to opposition from union members. In this case, Hyundai would have to bear the burden of labor-management risks along with the tariff risk in the U.S. market. This is because, while Japan, Hyundai's biggest competitor in the U.S., will benefit from a 15% tariff reduction starting tomorrow, our country is still subject to a 25% tariff in the U.S. due to prolonged follow-up negotiations.
As Hyundai revealed that the impact of the 25% tariff was 'partially' applied, resulting in an operating profit decrease of 828.2 billion won in the second quarter alone, the industry predicts that if the tariff is maintained in the third quarter, an operating profit decrease of over 1 trillion won will be inevitable. On the other hand, if more than half of the votes are in favor in this vote, this year's wage and collective agreement will be concluded.
However, the fact that Kia's labor and management have not yet reached an agreement remains an obstacle. After declaring a negotiation breakdown with management during the fifth negotiation on the 11th, the Kia union has taken steps towards a strike, increasing pressure. The union held a temporary delegates' meeting on this day to discuss the resolution of the dispute adjustment application and the formation of a strike committee. On the 19th, a vote on the strike action will be conducted for all union members. If more than half of the votes are in favor and the Central Labor Relations Commission decides to stop the mediation, the union will obtain the legal right to strike.
The Kia union is demanding a basic salary increase of 141,300 won and the distribution of 30% of operating profit as a performance bonus to union members. Considering that Kia's operating profit last year was 12.6771 trillion won, they are proposing to distribute 3.8031 trillion won as a performance bonus. In addition, demands include an increase in special overtime pay, extension of the retirement age to the age of receiving the national pension, and the introduction of a four-day workweek.
The union emphasized, "If a proposal that all union members can accept comes out, the union will engage in negotiations at any time," but also stated, "If the negotiations are delayed by stalling for time and only watching the timing, the union will make a decision." If the Kia union proceeds with a strike after taking steps towards it, the record of non-disruptive agreements that has continued for the past four years will be broken after five years.one1@fnnews.com Jeong Won-il Reporter