Hyundai Motor faces fresh strike amid slow sales

By Lim Chang-won Posted : December 1, 2017, 10:30 Updated : December 1, 2017, 10:30

[Courtesy of Hyundai]



South Korea's top carmaker, Hyundai Motor, faces a fresh interruption to domestic production after its militant union called for a four-day partial strike for up to three hours from December 5 in protest at a delayed wage deal.

The strike comes after workers suspended production for two days this week at their main plant in the southeastern city of Ulsan due to disagreement over the expanded production of Hyundai's new compact SUV, Kona. The suspension caused production losses worth about 20 billion won (18 million US dollars).

Partial strikes in August cost the company about 620 billion won in lost production. Ever since, Hyundai's union has made no concession in wage talks, and it now wants an increase in basic monthly payment by 154,883 won and a bonus tantamount to 30 percent of last year's total net profit estimated at 5.72 trillion won.

For years, frequent strikes, excessive demands and intervention in management have hurt Hyundai's competitiveness, contributing to low productivity and slow sales.

Hyundai's third-quarter net profit fell 16 percent on-year to 939 billion won. In the first nine months, operating profit fell 8.8 percent to 3.8 trillion won and net profit was also down 29.9 percent to 3.25 trillion won.

Workers at Hyundai and its affiliate, Kia Motors, are relatively well paid, along with good fringe benefits and welfare. However, they always remain ungratified, struggling to find a new source of extra income such as bigger overtime, bonuses, and other one-time incentives.

The Korea Automobile Manufacturers Association (KAMA) said in a report in August that at the end of 2016, the average income of workers at South Korea's five carmakers stood at 92.13 million won, which is higher than that of Volkswagen and Toyota.

Meanwhile, the combined amount of R&D spending by Hyundai and Kia stood at $3.4 billion last year, far lower than Toyota and Volkswagen, according to KAMA's data.

In an effort to boost production abroad, Hyundai seeks to strengthen localization in overseas markets by allowing each regional CEO to control production, sales, planning and financing. The company hopes to set up the first regional head office in North America by February next year.

 
기사 이미지 확대 보기
닫기