Union leaders at Hyundai Motor reportedly called off a series of strikes after agreeing on Thursday to a pay rise of just more than 6% and a one-off bonus.
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Reuters said the strike sparked an industry-wide walkout on Tuesday and cost the Korean car maker $US228 million in lost production.
Analysts reportedly said Hyundai’s labour costs are expected to rise almost 14% this year, reducing its competitive advantage over high-wage US and Japanese rivals and helping accelerate its move to build plants in central Europe and China.
“We have agreed on a 6.18% rise in base salary,” Chang Gyu-ho, a spokesman for Hyundai Motor’s union, told Reuters. The agreement reportedly also included a one-off, performance-linked bonus of up to two months’ pay.
The news agency noted that the union had demanded a 10.48% wage hike and a bonus worth 30% of the company’s profit as well as better treatment for part timers – Hyundai Motor’s 40,000 unionised workers will vote on the package on Monday.
Reuters said the union held six-hour strikes on Friday and Monday and full-day strikes on Tuesday and Wednesday – a three-hour strike had been called for Thursday and further walkouts were threatened. A strike at Hyundai last year went on for 45 days.
As of Wednesday, the strike had cost the company $228 million or 18,994 vehicles in lost production, according to company data cited by the news agency.
Hyundai is estimated to see labour costs rising by 352 billion won, or 13.8%, this year to 2.9 trillion due to the agreement, Kim Hag-ju, a Samsung Securities analyst, told Reuters.
But the company was able to continue selling cars from its inventory and on Thursday reported a 30% rise in June sales, aided by a 44% surge in exports to its key US and European markets, the report noted.
Hyundai Motor, which controls half of the local auto market, reportedly said sales in June jumped 30% to 196,242 vehicles, powered by its Santa Fe SUV and its New EF Sonata passenger sedan.
Hyundai’s exports reportedly soared to a monthly record of 149,921, pushing the firm’s first-half sales to the one-million-unit mark for the first time.
Reuters said exports by five local auto makers soared 56% to 306,830 vehicles in June from a year ago, taking total sales to 399,214 units, up 33.5%, but local sales shrank 10% to 92,384 units from a year ago as consumers remained shackled by huge credit card debt.
“People are unwilling to spend on big-ticket items like autos,” Kim at Samsung Securities told the news agency.
“Expectations for a revival in local demand are increasingly tapering off and exports will continue to be the main growth engine in the second half,” he added, according to the report.
