Labor Understanding
South Korea's auto industry has been suffering from strikes every summer. However, it is wrapping up talks on wages relatively fast, without particular disputes this year.
As there are growing concerns over struggling auto industry at home and abroad due to the economic recession, the labor unions in the domestic industry are all settling wage negotiations with the companies, without a single strike to date this year.
According to auto industry sources on July 28, GM Korea is highly likely to finalize the wage deal as early as the end of this week. On July 27, its union reached a tentative agreement with the company, and it will finalize the agreement as soon as possible by vote.
GM Korea’s union has already decided to go on strike. However, labor and management both came up with a tentative agreement the day before. Under the agreement, the company will raise the base pay by 83,000 won (US$71), while giving a 6.5 million won (US$5,572) bonus when an agreement is signed. It will also provide a 4 million won (US$3,429) performance-related bonus at the end of this year. This is a step back for the labor union. Previously, they demanded a raise to the base pay by 159,900 won (US$137), and to provide a performance-related bonus of 500 percent.
Renault Samsung Motors’ management and labor also finalized the wage agreement without disputes on July 23, which includes a base pay increase of 2.3 percent and a 7 million won (US$6,000) incentive for the compromise.
Now, only Hyundai-Kia Motors and Ssangyong Motor are left. The negotiations of Hyundai-Kia Motors are expected to start in earnest from the second week of Aug., when vacation season ends.
This year, Hyundai Motor will negotiate on both wages and collective bargaining, while Kia Motors will have talks on only wages. Since Hyundai Motor’s management and labor had the first meeting, they held dozens of rounds of talks until now. However, the talks so far are more like exploratory procedures between management and labor, since the vacation season for production workers starts from the first week of Aug.
The process of Hyundai Motors’ labor and management talks is slightly different from the usual. In the past, labor made tough remarks and the management made efforts to create public opinion favorable to the company when negotiations made slow progress. However, both sides agreed not to talk about the negotiation process to the outside this year.
Kia Motors’ management and labor have not yet met. Since they need to negotiate only wages this year, both management and labor are in no rush. It is said that Kia Motors’ labor is currently straightening out internal regulations and preparing wage increase proposals.
Ssangyong Motor’s labor is also currently in negotiations with the company over the base payment increase of 117,985 won (US$101) and the reinstatement of dismissed workers. Since the company has finished the agreements without disputes in the last five years, the negotiations are expected to be concluded smoothly this year as well.
An official from the auto industry said, “For labor in the car industry, many political interests are internally entangled. So, they have no choice but to take a strong stand against the companies in negotiation. However, labor is also forming a consensus over the recent economic downturn with the companies this year.”