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Korean Carmakers Afflicted with Exorbitant Labor Union Demands
Hostile Negotiations
Korean Carmakers Afflicted with Exorbitant Labor Union Demands
  • By Jung Min-hee
  • July 23, 2015, 07:15
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Renault Samsung Motors' labor union members shout slogans outside of the south gate of the company's Busan plant on September 12, 2012.
Renault Samsung Motors' labor union members shout slogans outside of the south gate of the company's Busan plant on September 12, 2012.

 

Korean automakers are suffering from lackluster sales and the weak yen. Nevertheless, labor unions are putting pressure on them, threatening to go on strike.

In May this year, the Hyundai Motor Company sold 54,990 and 334,309 cars inside and outside of Korea, respectively. The total went down by 6.4 percent from a year ago, while the domestic sales volume dropped by 8.2 percent and the overseas sales volume fell by 6.1 percent. During the same period, Kia Motors sold 40,010 cars in Korea and 202,044 cars abroad. The overseas sales volume declined by 7.0 percent and the total showed a 4.6 percent decrease.

Nonetheless, their union members are asking too much in their wage negotiations. The trade union of GM Korea has already decided to go on a strike, and that of Hyundai Motor Company recently declared an all-out strike in Ulsan City. GM Korea recorded 148.5 billion won (US$127.6 million) in losses last year, but the trade union of the company is calling for a 500 percent bonus along with a 159,900 won (US$127.39) increase in base pay. In Hyundai, the demands include the same base pay increment and a bonus of 2.2 trillion won (US$1.89 billion), equivalent to 30 percent of the net profits that the company earned last year.

In the meantime, the trade union of Renault Samsung Motors is demanding the construction of another manufacturing factory in Busan City with the one already in operation not even being 100 percent utilized. In Ssangyong Motors, the employers and the employees are in conflict other over issues such as higher severance pay, a 6.79 percent hike in base pay, and extension of the retirement age.