Hyundai Motor Group in Triple Whammy

The Hyundai Motor Group is suffering from a decline in sales, excessive tariffs and a strike. The group’s sales for the second quarter of this year are likely to have been sluggish as in the previous quarter. Besides, the United States is poised to impose a 25% tariff on imported cars. Nonetheless, unionized Hyundai workers are planning to go on strike.

According to industry sources, Hyundai Motor Company’s operating profit and sales for the second quarter are estimated at 1.0441 trillion won (US$949 million) and 24.1635 trillion won (US$21.7 billion), down 22.34% and 0.59% from a year earlier, respectively. For Kia Motors, the estimated figures are 396.9 billion won (US$357 million) and 13.5508 trillion won (US$12.2 billion), down 1.76% and 0.2% each from a year ago.
 

As mentioned above, the United States is considering imposing a 25% tariff on imported cars. Then, some of the Hyundai Motor Group’s manufacturing facilities may have to be shut down. Kia Motors’ plant located in Gwangju produced 492,233 cars and more than one-third of the cars were shipped to the United States last year.
 

In view of the circumstances, the group proposed a wage freeze earlier this year. However, it had to switch to an increase of 35,000 won (US$31) in base pay and a bonus of 200% plus one million won (US$900) amid vehement opposition from the unionized workers. Still, they are preparing a strike without accepting the new conditions, either. Yet another strike is looming large due to a huge difference in opinions. The workers are demanding a wage increase of 116,276 won (US$104) along with a bonus equivalent to 30% of the company’s net profit.
 

Kia Motors is on the verge of a strike as well in that the company’s and Hyundai Motor Company’s annual wage negotiations have proceeded in a similar fashion. In Kia Motors, this year’s wage negotiations started on June 21.