According to the automotive industry on June 28, the Hyundai union will officially discuss its strategies for action after the strike committee is established. Once the committee is formed, it is expected to determine specific forms of protest, including partial and total strikes, as well as refusals of overtime and additional work. After declaring a breakdown in negotiations with management on June 12, the union unanimously resolved to initiate a dispute at a temporary delegate meeting on June 23, and on June 24, it garnered an 86.65% approval rate in a vote among members regarding strike actions. The Central Labor Relations Commission acknowledged the differences between the company and the union on June 25 and decided to cease mediation. With all legal requirements for a strike met, the union plans to finalize its course of action.
If a strike occurs this year, it could result in losses exceeding the 300 billion won ($226 million) incurred last year. The union's expectations for bonuses have risen, with demands reaching 3.1 trillion won ($2.3 billion). Additionally, major companies like Samsung Electronics and SK Hynix have set new standards for bonuses, allocating around 10% of their operating and net profits for this purpose, further heightening the union members' expectations. Conversely, management argues that it is difficult to meet the union's demands due to declining performance amid rising protectionism, global economic uncertainties, and unprecedented investments in artificial intelligence (AI).
An industry insider noted, "This year's negotiations are complicated not only by wage increases and bonuses but also by the struggle for control over future production systems, making it unlikely for an agreement to be reached easily. Last year, the burden of a 'seven-year strike' led to a brief partial strike as a warning, but this year, there is less resistance to strike actions." Another source expressed concern that the high standards for bonuses, such as 30% of net profit, along with issues like extending retirement age and opposition to AI and robot implementation, make it challenging for management to propose viable solutions, increasing the likelihood of a prolonged strike with significant losses.
Last year, Hyundai's labor union caused production disruptions for about 7,000 vehicles due to a three-day (16-hour) partial strike stemming from labor negotiation conflicts. When calculated based on the average sales price per vehicle (42.65 million won), the estimated losses amounted to around 300 billion won. In addition to direct losses, there were substantial indirect damages due to production delays affecting customer satisfaction, parts suppliers, and brand value. The worst losses from a strike occurred in 2016, when a full strike over the expansion of the wage peak system resulted in production disruptions of 142,000 vehicles and direct losses estimated at around 3.1 trillion won.
If Hyundai proceeds with a total strike, a decline in performance this year will be unavoidable. In the first half of the year, Hyundai faced challenges due to increased logistics costs from the Middle East conflict, parts supply issues, a recall crisis involving the Palisade, and sluggish domestic sales. In fact, Hyundai's domestic sales from January to May totaled 258,481 units, a decrease of 11.7% compared to the same period last year (292,836 units). With a strike added to these challenges, the launch of new models such as the Avante, GV80 hybrid, and electric GV90 in the second half of the year will likely be adversely affected.
However, the union plans to continue negotiations with management, separate from discussions about a strike. In previous years, the union secured the right to strike in 2023 and 2024, using it as leverage to reach final agreements. Typically, Hyundai's wage negotiations conclude around August or September.
* This article has been translated by AI.
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