Hyundai Mobis lamp unit sale hits last-minute snag as Unitoos doubles bonus offer to 100 million won

Proposed incentive raised from 50 million won ($36,200) to 100 million won ($72,400)

Package includes job succession, R&D base retention and union status guarantees

Final sale agreement to require three-way sign-off by Hyundai Mobis, buyer and union

Workers from Unitoos and Hyundai IHL — both production subsidiaries of Hyundai Mobis — hold a rally in front of the Hyundai Mobis headquarters on Teheran-ro in Gangnam-gu, Seoul, on March 11. [Provided by the Korean Metal Workers' Union]

Labor-management tensions over Hyundai Mobis's planned sale of its lamp division have entered a new phase at subsidiary Unitoos, which has doubled its proposed "new start" incentive bonus from 50 million won ($36,200) to 100 million won ($72,400) in a bid to win over union members.

According to industry sources Tuesday, Unitoos submitted a formal proposal to its union under the name of CEO Moon Hong-gi, titled "Plan for the Continued Growth and Employment Stability of the Lamp Business." The proposal covers job succession, retention of research and development operations, preservation of union and collective bargaining rights, production volume stability and severance payment criteria.

The most prominent element is the compensation package. Unitoos said it would make a lump-sum payment to all full-time employees on the payroll at the time the sale proceeds.

The package is divided into two components: a contribution severance payment, calculated based on total performance bonuses paid from 2021 through 2025, and a new-start incentive bonus set at 100 million won. Combined, the total payout per employee is expected to reach approximately 200 million won ($144,800).

The new-start incentive represents a doubling of the 50 million won Unitoos had proposed last month. On that item alone, it also exceeds the 60 million won offered by fellow subsidiary Hyundai IHL by 40 million won. However, Hyundai IHL had separately included an additional 50 million won to cover the gap in contribution severance payments relative to other subsidiaries, meaning actual payouts will vary by individual.

The new-start incentive will be prorated for older workers nearing retirement age. As of the end of 2026, employees aged 56 will receive 70 percent of the bonus, those aged 57 will receive 50 percent, those aged 58 will receive 30 percent and those aged 59 will receive 10 percent. Employees aged 60 and above are excluded from the new-start incentive entirely. The contribution severance payment will be paid in full to all age groups.

Job security guarantees are also included. The proposal stipulates that when Hyundai Mobis signs a definitive agreement with the lamp division acquirer, key employment protection conditions must be incorporated. The acquirer would be required to maintain its domestic research and development base and research workforce, and to retain all current employees. Employment stability and workforce changes would be subject to review and approval by a dedicated employment stability committee.

Union members gather at the Unitoos factory in Gimcheon, North Gyeongsang Province, on May 18 for a general membership rally opposing Hyundai Mobis's restructuring plan. [Provided by the Korean Metal Workers' Union]

Union status and collective bargaining rights would also be preserved. The proposal states that the existing union will remain intact and that the current collective agreement, separate meeting records and labor-management accords will not be diminished. After the sale, matters related to employment stability, production volume, investment and business operations would be reported and discussed regularly through the employment stability committee and a labor-management council.

Provisions on maintaining employee benefits are also included. Existing working conditions — covering wages, working hours and welfare benefits — would be kept in place. For items that cannot be applied identically after the ownership change, such as the 5 percent factory-price vehicle discount available to Hyundai Motor Group employees, the acquirer would work with the union to develop equivalent alternatives.

Securing domestic production volume after the sale is another key condition. Hyundai Mobis committed to negotiating with the acquirer on the principle of maintaining the lamp business's domestic operational base, and said securing stable domestic production volume would be its top priority to protect long-term employment.

Union participation is also guaranteed in the final sale process. Hyundai Mobis said it would ensure the key terms of the proposal are reflected throughout the sale, and that a three-way agreement among Hyundai Mobis, the acquirer and the union must be reached before the final sale agreement is signed. The preferred bidder for the lamp division is French automotive parts maker OP Mobility.

Hyundai Mobis selected OP Mobility as the preferred bidder in January and has been in negotiations with a target of closing the deal within the first half of this year. Throughout the process, unions at subsidiaries including Hyundai IHL and Unitoos have pushed back, demanding job security, union status guarantees and stable production volumes.

Unitoos and Hyundai IHL are Hyundai Mobis subsidiaries that manufacture automotive lamps. Unitoos was established in 2022 by hiring workers from partner companies, while Hyundai IHL was acquired by Hyundai Motor Group in 2004.

Members of the Hyundai Mobis office workers' chapter of the Korean Metal Workers' Union's Gyeonggi Province branch have been staging a protest outside OP Mobility's headquarters in Paris, France, since June 1, demanding a halt to the sale and a guaranteed right of refusal for workers facing transfer. [Provided by the Korean Metal Workers' Union]

Hyundai IHL's union chapter passed a similar proposal on employment stability and lamp business continuity in a general membership vote last month. With Unitoos now putting forward an improved offer, the prospect of resolving labor disputes among production workers over the lamp division sale has grown considerably.

However, the path to a final agreement still requires union acceptance and a formal signing process. Internal disagreements among members over the severance criteria and the age-based proration of the new-start incentive could complicate the final stages of negotiation.

Even if tensions with the production subsidiaries are resolved, persuading office and research staff remains an outstanding challenge. The Hyundai Mobis office and research workers' chapter of the Korean Metal Workers' Union has objected to the sale process, arguing that white-collar and research employees were not adequately consulted or given a meaningful say.

The chapter recently took its campaign to Paris, staging protests outside OP Mobility's headquarters to demand a halt to the sale and a guaranteed right of refusal for workers facing transfer. It has also filed a formal complaint with the OECD's French National Contact Point, alleging ESG violations in the sale process involving Hyundai Mobis and OP Mobility.

Hyundai Mobis plans to resolve the remaining points of contention with the union this month and move forward with signing a definitive agreement with OP Mobility for the lamp division sale.

kwater@heraldcorp.com