Five major automakers in South Korea are set to conclude this year's wage and collective bargaining agreements (CBAs) by the end of August, following a vote on the Hyundai Motor and Kia agreement. This year's negotiations lasted a record 121 days, approximately 30 days longer than last year, with strike hours increasing to 86, nearly ten times the previous year's total of 8 hours. Unlike last year, this year's labor disputes emphasized job security over wage increases. With the strike risks now behind them, all five companies are expected to ramp up production in the second half of the year.
According to a report by Aju Economy on August 27, Renault Korea took the longest time to reach an agreement, starting its first meeting on April 27 and concluding negotiations on August 26, totaling 121 days. The agreement includes a basic salary increase of 51,000 won and a variable productivity incentive (PI) of up to 100% plus 2.5 million won, with a support rate of 50.1%.
Despite the extended negotiation period, the basic salary increase was reduced by 50% compared to last year, and the PI increase was also lower than the previous year. Instead of focusing on wage increases, the labor and management agreed to prioritize securing production volumes at the Busan plant and stabilizing employment. A Renault Korea official stated, "With the CBA finalized, we will focus on overcoming the challenging business environment and ensuring the success of new projects."
Hyundai Motor also took 111 days to reach a tentative agreement after starting its first labor meeting at the Ulsan plant on May 6, which is 24 days longer than last year's 83 days. The tentative agreement includes a basic salary increase of 100,000 won and a performance bonus of 400% plus 12.7 million won. Notably, the company experienced its first total strike in ten years, accumulating 60 hours of strike time, nearly 9.8 times the previous year's total of 8 hours. Production disruptions affected approximately 55,200 vehicles, leading to an estimated revenue loss of 2.5 trillion won.
Kia managed to conduct its negotiations without strikes for six consecutive years, but the negotiation period extended to 82 days, 38 days longer than last year. GM Korea and Korea GM reached agreements in 61 days and 56 days, respectively, making them the fastest among the five companies.
This year's CBA discussions shifted focus from wage competition to job security amid the transition to future vehicles. All five companies fought longer than last year, yet the overall compensation packages decreased. For instance, Hyundai's performance bonus dropped from 450% plus 15.8 million won last year to 400% plus 12.7 million won this year. Instead, non-wage benefits such as new hiring, job security, and domestic production guarantees were strengthened.
With the CBA risks resolved, the industry is tightening production once again. The five automakers sold 670,191 vehicles last month, a 3.5% increase compared to the same month last year. However, sales for three of the companies, excluding Kia (13.4%) and Korea GM (30.6%), saw significant declines. Hyundai's sales dropped by 5.1% due to production disruptions from strikes, while Korea GM and Renault Korea experienced decreases of 11.1% and 58.2%, respectively.
* This article has been translated by AI.
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