Hyundai Motor management and union representatives sit down for the opening session of this year's wage negotiations at the Ulsan factory on May 6. [Hyundai Motor]
Hyundai Motor management and union representatives sit down for the opening session of this year's wage negotiations at the Ulsan factory on May 6. [Hyundai Motor]

Hyundai Motor has asked its union — which recently secured the legal right to strike — to resume wage negotiations. With the union preparing to launch a strike action committee and begin discussions on the scope of potential industrial action, the company's move to propose talks first raises the prospect of further negotiations before any strike begins.

Hyundai Motor CEO Choi Young-il visited the office of the Korean Metal Workers' Union's Hyundai Motor chapter Monday to convey the company's intention to restart the stalled wage talks, according to industry sources. Formal negotiations have been suspended since the union declared a breakdown in talks on June 12.

The company is understood to have explained that, given the earnings pressure following last year's decline in operating profit — which has continued into the first half of this year — negotiations should resume as soon as possible to minimize production disruptions. The company also appears to have factored in the risk that a prolonged strike could deepen its financial burden at a critical time for second-half new-model launches and production normalization.

In response, union chapter head Lee Jong-cheol conveyed the position that members deserve fair compensation and profit sharing for their contributions, sources said. The union argues that Hyundai Motor's global sales performance this year and the role of its members justify increases in base pay and performance bonuses.

Under customary practice, negotiations could resume as early as this week. If talks reopen, the union is expected to hold off on an immediate strike and instead assess the company's initial offer and the pace of progress before setting a strike schedule and deciding on its intensity.

The union will nonetheless proceed as planned with the launch of its strike action committee on Tuesday. Once the committee is in place, it can begin deliberating on specific forms of action — including partial strikes, refusals of overtime and refusals of extra shifts — and set a timetable.

The union voted to authorize strike action on Wednesday, with 37,348 of the chapter's 39,668 members casting ballots — a turnout of 94.15 percent. Of those who voted, 34,371 supported the strike, representing an approval rate of 92.03 percent among voters and 86.65 percent of the total membership. The following day, Thursday, the National Labor Relations Commission determined that the gap between the two sides was too wide to bridge and suspended its mediation, formally granting the union the legal right to strike.

The central issues in this year's negotiations are wage increases, job security and the response to industrial transition. The union is demanding a base pay raise of 149,600 won ($97) per month, a performance bonus equivalent to 30 percent of last year's net profit, and guarantees on employment and working conditions tied to the introduction of AI. Its demands also include raising the bonus rate from 750 percent to 800 percent, shorter working hours without increased workload intensity, an extension of the retirement age tied to the national pension eligibility age, and new hiring.

Management has yet to table a formal offer in this year's wage negotiations. Eleven rounds of talks have been held since the opening session in May, but the two sides have been unable to narrow their differences. If negotiations resume, attention will focus on whether the company puts its first concrete proposal on the table.

A prolonged strike would be a serious burden for Hyundai Motor. In the first half of this year, the company faced simultaneous pressure on both production and sales from parts supply disruptions, recalls and logistics costs tied to instability in the Middle East. The second half brings a string of major new-model launches — including the new Avante, the new Tucson, a GV80 facelift hybrid and the Genesis flagship electric SUV GV90 — making it critical to keep production on track.

Even with the strike mandate in hand, it remains unclear whether the union will move immediately to industrial action. Hyundai Motor's union has frequently used the strike authorization as leverage in negotiations, reaching a tentative agreement without actually striking. In both 2023 and 2024, the union secured the right to strike but did not follow through.

This year, however, analysts say the negotiations are more complex than usual, as wage increases are intertwined with demands over retirement age extension, job security amid the shift to AI and automation, and the restructuring of domestic production. Both sides recognize the need to resume talks, but if the company's offer falls short of the union's expectations, discussions over the scale of strike action could quickly accelerate again.


kwater@heraldcorp.com