Hyundai Motor CEO appeals to union on wage negotiations

The CEO of Hyundai Motor Co. on Friday appealed to union workers to think about the fallout from a strike, reiterating that they should wait for the courts to determine what constitutes standard wages, an issue that is plaguing major conglomerates in labor talks this year.

In a statement released a day after union leaders declared a breakdown in negotiations, Yoon Gap-han stressed that management is committed to resolving this year's wage and collective bargaining agreement (CBA) talks in a peaceful manner.

"I am certain that most workers do not feel that the level of compensation provided by the company is inadequate and that they feel a pressing need to expand the scope of standard pay by discarding a decades-long understanding on wages," he said.

Wage levels at Hyundai, South Korea's No. 1 carmaker, are considered comparatively high in the manufacturing sector.

Yoon expressed regrets that the union leaders were not discussing in detail the demands they are making and the carmaker's position on each issue.

"Instead of just asking for more pay, it may be better to change the entire paradigm regarding compensation so it can be tailored to improve the health and welfare of workers," he said.

The Supreme Court in December ruled that all fixed bonuses should be counted as standard wages. The ruling expands the scope of standard wages, whose amount is used as a base in calculating overtime pay as well as severance pay at retirement. Business leaders say increased pay will raise their corporate costs when companies are struggling through a slump. 

Labor disputes have occurred nearly every year at Hyundai Motor since 1986. The management says a strike is detrimental to the company, which is growing increasingly reliant on exports to sustain its profits. Company officials say partial strikes by its 46,000 unionized workers last year cost the automaker 1.22 trillion won (US$1.18 billion) in lost production.

Hyundai Motor argues that its bonuses were not given uniformly or unconditionally to all workers, so they do not meet the court's criteria. The management wants the union to wait until the court rules on a separate case that specifically addresses Hyundai Motor's wages.

The union charges that the management is refusing to earnestly address the standard pay issue. They say this conflicts with the Supreme Court's ruling on the matter.

While labor management negotiations are expected to resume at Hyundai after workers return from summer vacation in the second week of this month, Hyundai's two rival carmakers already reached an agreement with their workers on the standard wage matter. Both Ssangyong Motor Co. and GM Korea Co. reached agreements on wage increases for this year, which includes bonuses, last month. (Yonhap)