Hyundai Motor, union fail to close gap

Hyundai Motor, which has the single largest labor union in Korea, failed to settle its annual wage talks with its union this week, breaking away from the long tradition of reaching a tentative agreement before Chuseok ― a psychological Maginot Line.

On Tuesday, Hyundai management and the labor union met again for marathon talks, but failed to narrow their differences, especially on the issue of including fixed bonuses and benefits into regular wages.

The management proposed setting up a new committee to discuss the issue ahead of next year’s wage talks, but the union dismissed the proposal, demanding that the new wage scheme be implemented immediately.

With the last meeting between the two sides before Chuseok ― one of the two major holidays in Korea ― having ended in a stalemate, union leaders started discussions to adjust schedules for possible walkouts next week.

“The Chuseok holiday has long been regarded as the psychological deadline for annul wage talks within the industry,” said an industry source. “With the Maginot Line breached, Hyundai is likely to face an uphill battle in the remaining talks.”

The 47,000-member union stopped work for 10 hours on Aug. 22 and 28.

Following the partial walkout, Hyundai said its output loss was estimated at about 16,500 vehicles worth 360 billion won ($350 million).

Regular wages are a sensitive issue for local manufacturing firms, especially in the labor-intensive automotive industry, as they serve as the basis for calculating all other payments, including overtime pay.

Since smaller carmakers including GM Korea and Ssangyong Motor decided to include bonuses as regular pay last month, Hyundai has come under growing pressure to follow suit.

Even though Hyundai Motor is waiting for its own court ruling, its union, along with those of other Hyundai affiliates including Kia Motors and Hyundai Mobis, has demanded that the new wage scheme be implemented right away.

In a related development, the labor issue at Renault Samsung Motors, the Korean unit of the France-based Renault Group, will also remain unresolved through Chuseok as the latest agreement reached between management and labor representatives failed to be approved in a union vote this week.

By Lee Ji-yoon (jylee@heraldcorp.com)