The labor unions of six subsidiary parts companies under the Hyundai Motor Group have initiated the first-ever joint strike within the Hyundai Motor Group. They demand equal performance bonuses and special incentives with Hyundai Motor and Kia Motors while advocating for the elimination of hierarchy among group companies.
According to automotive industry sources on Oct. 24, the labor unions of six subsidiaries, which include Hyundai TRANSYS, Hyundai Rotem, Hyundai MSEAT, and Hyundai BNG Steel, conducted a partial joint strike lasting 4 hours on the same day, with 2 hours for both day and night shifts. They have also scheduled an 8-hour strike for Oct. 26, with 4 hours for both day and night shifts.
In a joint statement issued on the same day, they stated, “The issues concerning incentives and performance bonuses paid unilaterally by Hyundai Group in the past year and this year have still not been resolved. To encourage Hyundai Group’s earnest negotiation and expedite the conclusion of collective bargaining for 2023, we have resolved to engage in this joint strike.”
Furthermore, they claimed, “Hyundai Motor Group’s Yangjae neighborhood-based headquarters has been practicing a hierarchy within its subsidiary companies for a long time, resulting in discrimination regarding salary and welfare programs. In the past year and this year, they unilaterally determined bonuses and performance incentives by adding the subsidiary’s profits to the already hierarchical salary structure.”
The issue that the labor unions are demanding is the payment of “special incentives and performance bonuses equivalent to Hyundai Motor and Kia Motors.” They argue that they have not received proper recognition for their contributions to Hyundai Group's performance.
Hyundai Motor and Kia Motors paid a special incentive of 4 million won (US$2,968) to all employees last year in response to the COVID-19 pandemic, followed by a special performance bonus of 6 million won at the beginning of this year. However, other subsidiaries, excluding Hyundai Mobis, received performance bonuses at a lower level of 3 million won, and subsidiaries aside from these did not receive any bonuses.
The labor unions emphasized, “Despite achieving a performance exceeding 3 trillion won while supplying critical components in the automotive industry through just-in-sequence methods and working in harsh labor conditions, Hyundai Motor Group’s so-called ‘Yangjae Guidelines’ not only justify discrimination against subsidiary workers but also aim to expand it. The responsibility for the labor-management conflict lies in Yangjae, which fails to recognize the reality properly.”
This joint strike is exceptional compared to the past practice where other subsidiaries followed suit after Hyundai Motor and Kia Motors resolved labor negotiations. It appears to have been influenced by the fact that Hyundai and Kia Motors’ labor unions have adopted a tougher stance and secured the highest-ever level of performance bonuses. If the strikes in component manufacturers persist, it is likely to cause disruptions in Hyundai and Kia’s automobile production.
On the other hand, management’s stance is that it’s not feasible to meet the union’s demands. Immediately following the union’s decision to strike, Hyundai TRANSYS released a statement addressed to its employees, stating, “Special incentives are not within the scope of collective bargaining discussions, and the rewards for employees’ efforts have been adequately reflected in this year’s record-high performance bonuses. If we lose the trust of our clients due to a strike, attracting new business becomes practically impossible.”