Hyundai Motor production losses near W1tr as union plans three more days of strikes before summer break

Hyundai Motor's headquarters in Seocho-gu, Seoul, on Thursday [Newsis]

The Hyundai Motor union will stage three additional days of partial strikes just before the company's summer vacation. Production disruptions have already snowballed following strikes and overtime refusals since mid-July, and the union is now halting assembly lines through the final days before the break to intensify pressure on management. Industry observers warn that cumulative production and sales losses could surpass 1 trillion won ($675 million).

The Hyundai Motor chapter of the Korean Metal Workers' Union decided at a central dispute committee meeting Thursday to hold four-hour partial strikes on each of the three days from July 29 to 31.

"We will advance without wavering to establish an equal labor-management relationship through resolute struggle and to win this year's wage and collective bargaining negotiations with the strong solidarity of 40,000 union members," the union said.

The strikes will halt work for four hours each for both the day and night shifts.

From July 29 to 31, the day shift and the first permanent shift will strike from 10:50 a.m. to 3:30 p.m., while the night shift will walk out from 7:30 p.m. to 12:10 a.m. the following day. The permanent day shift will participate from 12:40 p.m. to 4:40 p.m., and general staff from 1 p.m. to 5 p.m.

On a production-line basis, the stoppages could cause up to eight hours of lost operation per day, adding up to a maximum of 24 hours of additional disruption over the three days.

The Hyundai Motor factory in Buk-gu, Ulsan, after day-shift workers left for the day on Monday, when the union launched a four-hour partial strike over stalled wage negotiations. [Yonhap]

The union had already staged two-hour partial strikes per shift from July 13 to 15, then escalated to four-hour stoppages from Monday through Wednesday. With weekend overtime refusals compounding the disruption, production losses have already mounted sharply. If the additional strikes scheduled for July 29 to 31 proceed as planned, cumulative lost production time on the assembly lines could reach a maximum of 60 hours — and the actual output loss, including the overtime refusals, is expected to be even greater.

The timing of the latest action — immediately before the summer break — gives it added weight as a pressure tactic against management.

Hyundai Motor's domestic factories will be on summer vacation from Aug. 3 to 7. When the surrounding weekends and the period without overtime are factored in, production will in effect be halted from Aug. 1 through Aug. 9.

The union will continue striking through July 31 before entering the vacation period. The next central dispute committee meeting is scheduled for Aug. 11, meaning further action remains possible if negotiations fail to progress after the break.

On-site rallies will accompany the strikes. The union plans to hold a general strike resolution rally for all members on July 29, with the first shift holding division-level report meetings and the second shift holding a main-building resolution rally. Division-level report meetings are scheduled for July 30, and constituency-level report meetings for July 31. The sales, service, Namyang and Mobis committees will each adjust their total strike hours on the day to suit their respective circumstances.

Production losses are growing rapidly. Cumulative sales losses from strikes and overtime refusals since mid-July are already believed to be approaching 700 billion won. With three more days of partial strikes added from July 29 to 31, observers say the total could swell to around 1 trillion won.

Hyundai Motor also faced production disruptions in the first half of the year. A fire at parts supplier Anjeon Industrial in March caused component shortages that left Ulsan plants No. 2, No. 4 and No. 5 struggling to operate normally for roughly a month and a half through April and May. The company had been counting on new model launches and a production recovery in the second half to make up the ground lost, but the July strikes, ongoing line-conversion work and the August summer shutdown are all pushing back the timeline for a return to normal output.

The core issues between labor and management remain far apart. The union is demanding a base pay increase of 149,600 won per month, a performance bonus equal to 30 percent of last year's net profit, an 800 percent increase in bonuses, an extension of the retirement age and the reinstatement of dismissed workers. Management has countered with a base pay raise of 89,000 won, a performance payment of 350 percent plus 10 million won, and 15 shares of company stock — an offer the union has rejected as insufficient.

kwater@heraldcorp.com