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August 25, 2016

Hyundai Motor ‘tentative’ wage deal with union

Hyundai Motor says it has reached a tentative wage pact with its South Korean labour union.

Hyundai Motor says it has reached a tentative wage pact with its South Korean labour union.

The agreement is subject to a vote by about 48,000 union members on Friday (26 August).

The Reuters news agency notes that workers at Hyundai Motor's plants in South Korea staged walkouts between July and August over annual wage demands, leading to a production loss of some 65,500 vehicles.

The report said that under the tentative agreement, Hyundai Motor will increase workers' basic monthly pay by 58,000 won; give each worker a one-off payment of 3.3 million won as well as bonus and incentives payments worth 3.5 times their basic monthly wage; and each worker will also receive 10 Hyundai shares.

Hyundai also said the union had agreed to cut bonuses this year and refrain from excessive wage rises due to the 'difficult business environment', according to the report.

Reuters noted the union had threatened more strikes if there was no agreement on this year's package.

Hyundai Motor is experiencing a difficult period in terms of financial results hit by lower exports, weaker demand in emerging markets and adverse currency movements. For the first six months of 2016, operating profit fell 7% to KRW 3.10 trillion and net profit showed a 6.4 percent decrease to KRW 3.53 trillion. The company also forecast that an 'unfavourable business environment' is likely to continue in the second half. 

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