Hyundai Motor's union began a full eight-hour strike for the first time in 10 years since 2016. It is pressuring management to push through three demands: a 50% increase in bonuses, reinstatement of dismissed union members, and an extension of the retirement age. As the union has steadily escalated the intensity of its strikes, the revenue loss from production disruptions from last month to now has far exceeded 2 trillion won.
According to the automaking industry on the 21st, all production lines at Hyundai Motor's Ulsan, Jeonju and Asan plants will come to a complete halt for the day. Under the union's directive, the morning and afternoon shifts are each launching full eight-hour strikes. This kind of full strike is the first in about 10 years since Sept. 26, 2016. About 39,000 people, including office workers as well as production workers, will take part in the strike.
Hyundai Motor's union is steadily ratcheting up the intensity of its strikes. Since on the 13th of last month, it carried out three partial strikes, each lasting two to four hours. But on the 14th of this month, it extended them to six hours, and expanded to an eight-hour full strike on the day. The strike period also grew: early on it was in three-day blocks, but on the 18th it expanded to five-day blocks for the 19th–24th.
Labor and management remain far apart. The union is focusing on three demands: a 50% increase in bonuses, reinstatement of dismissed members, and an extension of the retirement age. On bonuses, the union said on the 20th that while retained earnings rose 882% from about 11 trillion won in 2007 to about 101 trillion won last year, the average annual salary per union member increased only 196% over the same period, adding, "Even if the company is bursting with money, it won't release it to the shop floor."
On reinstating dismissed members, the union says it must be won because they lost their jobs after leading the struggle at the forefront. In the past, dismissed members recognized by the union were reinstated through labor-management agreements. On extending the retirement age, it said, "Regardless of legal revisions, there is a history of extending the retirement age through collective bargaining," adding, "The additional expense from a two-year extension of the retirement age would be up to 180 billion won per year, and there is no reason Hyundai Motor capital, which posts 13 trillion won in annual net profit, cannot bear it."
Management, meanwhile, says it cannot accept the union's demands without a legal basis or rational standards. It says bonuses have continued to rise in line with annual base pay increases, and if fixed bonuses increase, manufacturing costs rise and competitiveness drops sharply. It also argues that extending the retirement age requires a legal revision that corporations find difficult to decide on their own, and that reinstatement of the dismissed is not possible because the dismissals were ruled legitimate by the courts.
That said, in talks on the 18th, management did step back on the issue of reinstating the dismissed, saying it would discuss by year-end whether to reinstate them, taking into account their own wishes. Even so, the union rejected it, saying it was a "shallow 'face-saving show' to dodge an immediate strike." The union plans to hold off on strikes if talks resume, but says, "We will negotiate again only if there is a more advanced proposal," leaving the timing of resumed talks uncertain. The talks on the 18th were the first in 41 days.
In the process, Hyundai Motor's production disruptions are snowballing. Including the full strike on the day, the union's cumulative strike hours this year have risen to 60 hours. Adding the strike hours of each of the morning and afternoon shifts, production lines have been halted for 120 hours. Applying last year's figure that Hyundai Motor produced 460 units per hour, cumulative production shortfalls this year come to 55,200 units. Using a per-vehicle sales price of 42.65 million won, the resulting revenue impact is estimated at 2.35 trillion won.
It has also become difficult to benefit from new-car effects in the second half of this year. Hyundai Motor unveiled a partial-change Grandeur in May last year and a full-change Avante on the 14th of last month, and recently revealed the full-change design of the Tucson, putting launch plans on the verge. If the union strike drags on, overall strategy setting, including production plans and launch schedules, will inevitably become difficult.
Meanwhile, on the afternoon of the day, Hyundai Motor's union plans to join the "joint strike rally for the automobile sector" hosted by the Metal Workers' Union in front of Hyundai Motor Group headquarters in Yangjae-dong, Seoul. The Metal Workers' Union expects around 3,000 automobile-sector union members to gather on the day. The Metal Workers' Union said it plans to "break the monopoly of profits by chaebol conglomerates and enforce distribution across the supply chain, including parts makers and subcontractors."