The union for workers at South Korea’s top car maker, Hyundai Motor, reportedly said on Wednesday it had failed to agree a pay deal and would hold a further partial strike on Thursday.
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Reuters noted that the country traditionally faces a seasonal rise in union action every summer, but labour unrest this year poses a big headache for a government struggling to bolster sluggish local demand and business spending.
Foreign investors also reportedly cite labour strife as part of the reason for the low value of local stocks, known as the “Korea discount.”
The latest strike decision by the union will extend a four-day walkout, according to Reuters.
“We’ve failed to narrow differences and negotiations with management will resume on Thursday at 9 am (0000 GMT, Thursday),” Chang Gyu-ho, a union spokesman at Hyundai Motor, told Reuters, adding union members will hold a three hour strike starting at 2 pm on Thursday.
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By GlobalData“But the two sides are doing their best and working level officials from each side will keep contact tonight for a speedy conclusion,” Chang reportedly said.
The union reportedly is demanding a 10.48% wage hike and a bonus worth 30% of the company’s profit. If agreed, this would lift average Korean auto worker pay rates to $US27 an hour, above their US peers’ $26 an hour.
According to the news agency, analysts have said prospects for a relatively short strike had buoyed Hyundai’s share price – a strike at Hyundai last year went on for 45 days. Although they also reportedly said a long strike could help Hyundai reduce high inventories of unsold cars, particularly for the depressed local market, where consumers are reluctant to spend because of heavy credit card debts.
Reuters said that Hyundai’s 40,000 unionised workers held six-hour strikes on Friday and Monday, before staging full day-long strikes on Tuesday and Wednesday.
The union at unlisted GM Daewoo Technology Automotive and former Daewoo Motor’s Pupyung plant voted on Wednesday to strike with 65% support, a union official told Reuters, but the union has yet to decide when to go on the strike.
The news agency said the strike could dampen prospects for General Motors’ plan to take over the plant, which was left out of the US firm’s acquisition of the bankrupt Korean car maker in 2002.
SsangYong Motor reportedly said the country’s sports utility vehicle maker resumed operations on Wednesday after a four-hour strike a day earlier.
