Hyundai Motor’s union in S.Korea votes to strike after stalled negotiations

The brand of Hyundai Motor Firm is pictured on the New York Worldwide Auto Present, in Manhattan, New York Metropolis, U.S., April 13, 2022. REUTERS/Andrew Kelly

SEOUL, July 1 (Reuters) – Hyundai Motor Co’s (005380.KS) unionised staff in South Korea voted for a potential strike for the primary time in 4 years over calls for for greater wages and anger that administration was prioritising abroad funding.

The union, one of many largest within the nation with greater than 46,000 members, stated on Friday that 81.63% of its voting union members had accepted strike motion except the corporate settle for their calls for.

If the union does strike, different industries may observe go well with, threatening to sluggish South Korea’s manufacturing-reliant economic system, which final month noticed exports develop at their slowest tempo in additional than 1-1/2 years. learn extra

The union is looking for a minimal primary month-to-month pay enhance of 165,200 received ($127) and a efficiency pay equating to 30% of Hyundai’s 2022 web revenue, as hovering inflation cuts into staff’ wages.

It is usually demanding Hyundai put money into the nation to assist new companies together with city air mobility, purpose-built autos and electrical vehicle-related auto elements manufacturing.

“Inflation has been dashing up even after we got here up with our demand, so many people really feel that our wages have to sustain with this hovering inflation,” a union member at Hyundai Motor advised Reuters on situation of anonymity.

Negotiations between Hyundai’s union and administration, which began in Might, stalled final month.

UNION DEMANDS

The union’s calls for come after Hyundai Motor Group, which homes Hyundai Motor and Kia Corp (000270.KS), introduced greater than $10 billion funding plans in the US by 2025 together with $5.5 billion EV and battery amenities in Georgia. learn extra

The auto group stated in Might it will additionally make investments 21 trillion received ($16 billion) via 2030 to increase its EV enterprise in South Korea. learn extra

In March, Hyundai Motor stated it targets to attain a 7% market share within the international EV market by 2030, with an annual gross sales goal of 1.87 million autos.

Analysts say because the union’s new chief has adopted an aggressive negotiating stance, the probabilities of Hyundai dealing with a partial strike this 12 months might be extra seemingly than final 12 months, placing in danger its income development simply as a chips scarcity utilized in vehicles is predicted to ease in coming months.

“If the union decides to go on strike, Hyundai would face inevitable manufacturing output loss, when they should ramp up manufacturing to satisfy robust automobile demand,” stated Cho Soo-hong, an analyst at NH Funding & Securities.

South Korea’s economic system was already dealt a blow in June when unionised truckers went on a nationwide strike for greater than per week to protest hovering gasoline prices, motion that crippled ports and industrial hubs. learn extra

Annual inflation accelerated to five.4% in Might, the quickest in practically 14 years, including to the chance of weaker home demand in Asia’s fourth-largest economic system.

Shares of Hyundai Motor closed down 0.3%, versus the benchmark KOSPI’s (.KS11) 1.2% fall.

($1 = 1,297.2700 received)

Reporting by Heekyong Yang, Further reporting by Jihoon Lee; Enhancing by Shri Navaratnam and Jon Boyle

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