Labor unions at several parts and logistics subsidiaries affiliated with Hyundai Motor Group have gone on strike or warned of strikes, signaling a spread of "hard-line struggle" moves. The company says it will minimize production disruptions, but with labor talks faltering, there is talk that the situation could drag on.
Starting this month with Hyundai Motor, wage and collective bargaining talks are expected to face friction over robots and other issues. Hyundai Motor Group's labor management capability is being put to the test.
According to the complete car industry on the 12th, labor talks at Unitus, a Hyundai Mobis subsidiary, have fallen back into uncertainty. The Kimcheon Hyundai Mobis chapter of the Korean Metal Workers' Union (the Unitus union), which had been on a full strike since the 27th of last month, returned to work on the 11th while negotiating with management over a "memorandum of agreement for the continued growth of the lamp business and job security," but when talks ultimately broke down, they launched another general strike starting that day. Wording in the agreement such as "continue consultations with the acquirer" and the size of consolation payments were cited as reasons for the breakdown.
Unitus is a Hyundai Mobis subsidiary that produces airbags and lamps. Hyundai Mobis holds 100% equity. Only the union at the Kimcheon plant, which handles lamps, has gone on strike, and they plan to hold a protest at headquarters in Gangnam-gu, Seoul, on the 13th.
Unions from Hyundai IHL, another lamp-specialized subsidiary of Hyundai Mobis, and the white-collar union in the lamp institutional sector at Hyundai Mobis will also take part in the protest. The executive-level union at Motras, a module subsidiary 100% owned through equity by Hyundai Mobis, has decided to attend in support.
Unitus and Motras are integrated subsidiaries established in 2022, when Hyundai Mobis directly hired employees from partner firms to specialize in the production of modules and parts. Hyundai IHL was a company called Inhe Lighting, acquired by Hyundai Motor Group in 2004 and renamed to its current name in 2011. Hyundai Mobis owns 99.38% equity.
Hyundai Mobis appears likely to sell Unitus's Kimcheon plant that produces lamps, Hyundai IHL's Gyeongju and Daegu plants, and its own lamp research and development department. It has selected French parts maker OP Mobility as the preferred negotiation partner and is discussing detailed terms. The acquisition process is expected to be completed as early as the first half of this year.
Union members directly tied to the sale of the lamp business unit will join the protest on the 13th. They oppose the sale of the lamp business unit and are said to be taking issue with the lack of explanation from management during the decision-making process.
Signs of strikes are also seen in logistics. The Hyundai Motor–Kia parts transport union, which carries parts from Mobient, a module subsidiary of Hyundai WIA, has mentioned a strike. These union members belong to logistics companies Daejin Logis and Eugene Logistics. They had long transported parts produced by Mobient, but a labor dispute arose over raising freight rates.
The union argues for higher freight rates and insists on talks with the responsible party, saying Hyundai Motor and Kia are the prime contractors, making it difficult to resolve the conflict. Labor and management are currently renegotiating.
Some in the industry had suggested that a situation similar to Hyundai Mobis could unfold over the sale of Hyundai WIA's defense business institutional sector. However, because Hyundai WIA has not formalized a sale of its defense business institutional sector, there have been no particular moves by the union.
With the implementation of the yellow envelope law, a new labor law aimed at strengthening the bargaining rights of subcontract workers (Trade Union and Labor Relations Adjustment Act Articles 2 and 3 amendment), analysts say pressure to negotiate with Hyundai Motor Group will intensify. They interpret that wage and collective bargaining talks with the prime-contractor union, which began amid strong bargaining demands from subcontractor unions, will also add pressure.
At Hyundai Motor's labor talks that held an initial meeting on the 6th, not only the size of performance bonuses but also job security related to the introduction of the humanoid robot Atlas and physical artificial intelligence (AI) were added to the agenda.
The union included the introduction of a full monthly salary system in its demands. Hyundai Motor's production and technical workers are paid hourly. The union believes that if Atlas is deployed on production lines, employees' working hours will decrease, likely leading to lower wages, and thus aims to raise the proportion of fixed pay.
Management, on the other hand, views the increased fixed costs as making this a difficult area for negotiation. With a wide gap between Hyundai Motor labor and management, talks are expected to be tough.
Hyundai Motor Group's wage and collective bargaining has expanded each year from Hyundai Motor to its affiliates. Because talks at affiliates such as Kia and Hyundai Mobis have not started, the unions' demands have not been disclosed. However, analysts say it is highly likely they will present conditions similar to Hyundai Motor union's demands.
An industry official said, "Given that the union warned of an all-out confrontation when the plan to deploy Atlas was announced in January, related negotiations will not be easy."
The labor management line at Hyundai Motor Group, which recently underwent personnel changes, now faces a tough assignment. Hyundai Motor Group recently elevated its labor management organization to the president level and named Choi Jun-young, the Kia president, to head policy development overseeing groupwide labor. The personnel move was seen as a preemptive response to subcontractor unions' bargaining demands and strike risks.