No Longer Effective Tactics
The Hyundai Motor union members’ achievements in the wage negotiation are smaller than in the previous years as the company faces now a crisis and the union’s tactics are no longer effective.
Hyundai Motor Company announced on January 16 that its employers and employees finished their wage negotiation for 2017 in nine months. At the meeting of the trade union on January 15, 61% of the union members voted for a tentative agreement.
According to the agreement, the employees’ base pay will be raised by 58,000 won, their merit pay will be calculated to be 300% plus 2.8 million won, and 3,500 subcontract workers in the company will be hired by the company in or before 2021.
This is the first time since the formation of the trade union three decades ago that their wage negotiation for one year finished in the following year. For reference, the negotiation was completed in five months in the previous year. Still, the union members’ achievements are smaller than in the previous years. This is because the company is now facing a crisis and the union’s tactics are no longer effective.
After the rejection of the first tentative agreement on December 23 last year, the unionized workers had four more rounds of negotiations with the management before reaching the second tentative agreement. They staged five strikes during the course to get a pay increase, and the strikes led to a production loss of 414 billion won. Nonetheless, the 51,000 or so workers had to be content with 200,000 vouchers after the strikes. In other words, the workers caused the company to suffer a loss of more than 400 billion won in order to get vouchers equivalent to about 10.2 billion won. The losses become even greater when the lost wages of the workers who participated in the strikes are taken into account.
For the past 30 years, unionized Hyundai Motor workers have demanded an excessive pay increase regardless of the business performance of the company and staged a strike once their demand is rejected. As a result, their average annual salary is now close to no less than 100 million won and the automaker is now without its biggest forte, that is, a decent quality at a reasonable price. This is one of the reasons why the company is struggling in its major markets like China these days.