Hyundai Motor(005380) the labor union (Metal Workers' Union Hyundai Motor chapter) decided once again to launch an additional strike. It is a strike for the third consecutive week. Unlike previous years, as the union's strike drags on, losses from production disruptions at Hyundai Motor are expected to grow further.
On the 23rd, the Hyundai Motor union held a central strike committee meeting and decided to strike for four hours a day from the 29th to the 31st. Earlier, the union began this year's first industrial action with a two-hour strike per shift from the 13th to the 15th, then raised the level by extending the strike to four hours from the 20th to the 22nd. It is also maintaining its refusal of overtime and weekend work that has continued since early this month.
This year's wage talks are also expected to continue until after the summer vacation. Considering follow-up procedures such as announcing the tentative agreement and a vote by union members, a tentative agreement must be reached on the 24th for a deal before the vacation. But with the union confirming a strike through the end of this month on this day, the talks are now likely to drag on.
This year's Hyundai Motor wage negotiations have seen no progress since the 15th round of talks on the 8th. Hyundai Motor labor and management remain at odds over the size of the wage increase, bonus increase, reinstatement of members dismissed for illegal acts during past union activities, and extending the retirement age. The union keeps saying, "Present a forward-looking plan," while the company repeats, "There is nothing more to concede."
At the 15th round of talks on the 8th, management proposed raising the base salary by 89,000 won, paying a performance bonus of 350% plus 10 million won, and granting 15 shares of stock, but the union rejected the offer as falling short of members' expectations and went on strike.
The union is demanding a 149,600-won increase in base salary this year (excluding step increases), payment of a performance bonus equal to 30% of last year's net profit, and raising the bonus to 800% (from the current 750%). It also included extending the retirement age to 65, introducing a 4.5-day workweek, and reinstating dismissed workers.
Industry observers estimate production disruptions from the union's strike at roughly 430 vehicles per hour and about 18.7 billion won per hour. The projection factors in the average vehicle price and each plant's units per hour (UPH). Applying that to the total strike time so far of 36 hours yields about 15,800 vehicles and 673 billion won, and adding the newly announced strike hours to make it 48 hours expands the figures to 20,640 vehicles and about 897.6 billion won.
Hyundai Motor disclosed that, on a consolidation basis, it posted an operating profit of 2.8509 trillion won in the second quarter this year. That was down 20.8% from a year earlier, largely due to production disruptions of high value-added models following a supplier fire. If the production disruptions from the strike continue, losses are expected to continue.