Hyundai Motor and its labor union have reached a tentative agreement that includes a base salary increase of 100,000 won and a performance bonus of 400% plus 12.7 million won. While a vote by union members is still pending, the parties have cleared a significant hurdle. Following Hyundai Steel, the negotiations at Hyundai Motor are nearing completion, which is expected to positively influence labor negotiations at other affiliates such as Kia and Hyundai Mobis.
◆ Tentative agreement reached after 111 days; individual wage increase effect estimated at 40 million won
The tentative agreement was reached during the 17th round of negotiations held at the Ulsan plant from August 24 to 25. The agreement includes a monthly base salary increase of 100,000 won, a performance bonus of 400% plus 12.7 million won, 15 shares of stock, 500,000 won in welfare points, and a 200,000 won increase in summer vacation pay. The company also agreed to hire a total of 500 new technical workers, with 200 to be hired in the second half of next year and 300 in 2028. The union estimates that the wage increase effect for each member will reach 40 million won.
Key issues from this year's negotiations, such as the increase in bonuses, will be revisited in next year's collective bargaining. Regarding the extension of the retirement age, it was agreed to implement it without expanding the wage peak system if related laws are amended. The parties also agreed to strengthen cooperation during the transition to future industries, recognizing the need to adopt technologies such as physical artificial intelligence and robotics to secure corporate competitiveness, and to share progress on new businesses and technologies.
Despite initially threatening a full strike, the union and management found common ground after 111 days of negotiations. This year, the total strike time was recorded at 60 hours per member, which translates to 120 hours for a two-shift production line. Industry estimates suggest that production disruptions amounted to approximately 55,200 vehicles, resulting in a revenue loss of over 2.3 trillion won.
If the tentative agreement is approved in the union-wide vote scheduled for August 31, Hyundai Motor's wage negotiations for this year will be finalized. The company has also agreed to lift all 10 injunctions related to damages incurred during union activities.
◆ Impact on Kia and affiliate negotiations; subcontracting issues remain a variable
The tentative agreement at Hyundai Motor is expected to influence other group affiliates currently facing labor disputes. As the flagship company, Hyundai Motor's agreement has served as a benchmark for group labor negotiations. The Kia union began negotiations with management on the same day. Kia's third proposal, presented on August 20, included a base salary increase of 98,000 won, a performance bonus of 400% plus 12 million won, 45 shares of company stock, 200,000 won in traditional market gift certificates, and 50,000 won in special points. If the union accepts the management's proposal, the negotiations will conclude without a strike.
However, labor disputes at parts suppliers like Hyundai Mobis remain unresolved. The production of finished vehicles relies on the timely supply of numerous parts, so a key strike could impact the production lines of Hyundai and Kia.
The issue of subcontracting negotiations, following the implementation of the Yellow Envelope Law, also remains a variable. The Ulsan Regional Labor Relations Commission has recognized the employer status of Hyundai's in-house subcontracted production workers, cafeteria staff, and security personnel, increasing the likelihood of broader negotiation scopes in the future.
An industry insider noted, "The results of Hyundai Motor's wage negotiations have traditionally served as a guideline for negotiations at group affiliates," but added, "With ongoing negotiations at affiliates and subcontracting issues, it will take time to resolve the overall labor uncertainties within the group."
* This article has been translated by AI.
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