Hyundai fears output loss from partial strikes

Union workers at Hyundai Motor’s Ulsan plant staged four-hour partial strikes on Friday amid their stalled talks with management over considering bonuses part of regular wages.

With the union planning to refuse overtime work on the weekend, South Korea’s largest carmaker is expected to suffer production losses worth some 150 billion won ($147 million) for this week alone.

The 47,000 member union put down its tools for two hours on Friday morning and two hours again in the evening. It plans to continue partial strikes during the coming days.

“We will continue to fight until our demands are met,” said a union official.

After some smaller carmakers like GM Korea and Ssangyong Motor decided to count bonuses and other fixed benefits as ordinary pay, Hyundai Motor Group came under growing pressure to follow suit.

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

Even though Hyundai is waiting for its own court ruling, which will come as early as next year, the union, along with other Hyundai Motor Group affiliates such as Kia Motors and Hyundai Mobis, have demanded that the new wage scheme be implemented this year.

But management has resisted the demand. Hyundai offers bonuses only when an employee has worked for more than 15 days over the previous two months. That should not be considered “regular” pay, the company claims.

“We find the union’s decision regrettable,” said a company official, adding that management will continue to talk with the union to minimize the impact.

Last year’s 10-day partial strikes were estimated to have caused the carmaker an output loss of 50,191 vehicles worth 1.02 trillion won. Its overseas sales were hit particularly hard at the time.

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