Salespeople of Automakers Gearing up for Strike
The Korean auto industry is suffering from a triple whammy –- a sharp drop in sales amid the spread of COVID-19, intensifying competition in the field of eco-friendly cars and labor union risk.
The Korea Metalworkers Union’s Automobile Sales Solidarity Branch, which includes a large number of non-regular salespeople of Hyundai Motor and Kia Motors, is preparing for a strike ahead of the start of wage and collective bargaining for 2020 at major automobile companies. Ninety-seven percent of the branch members voted for going on a strike.
The chairpersons of the Hyundai, Kia and GM Korea labor unions are going to have a meeting. They were scheduled to meet on Sept. 4 but could not due to a resurgence of COVID-19 cases. They are expected to share progress in their wage and collective bargaining talks and discuss ways to form a common front. Some predict that the labor unions of the three automakers will turn to a hard line as they have already secured the right to strike with 80 percent of the union members' approval.
The labor unions of Hyundai Motor and Kia Motors are at odds with the management over wage hikes and a shift towards electrification. Hyundai Motor's labor union, which had hinted at freezing wages to under the spirit of mutual growth with the company, has changed its attitude. A senior Hyundai Motor executive in charge of labor-management relations recently visited a factory in Ulsan and called for pain sharing, saying, "Wages should be frozen, and it is difficult to pay performance-based bonuses as global automakers are all in a liquidity crisis."
However, the Hyundai Motor labor union is demanding a basic pay raise of 120,304 won and distribution of 30 percent of the automaker’s net profit in 2019 to employees in the form of a bonus for 2020.
However, due to the impact of the COVID-19 pandemic, Hyundai Motor's first-half sales and operating profit plunged 7 percent and 30 percent on year, respectively, making it difficult to accept the union’s demands. Another bone of contention between the labor and the management is the establishment of a factory dedicated to electric vehicles. Hyundai Motor plans to convert the second production line of its Ulsan Plant 1 to an electric vehicle line, but the union is demanding the establishment of a new plant dedicated to electric vehicles, saying that the company’s plan may reduce demand for labor.
The Kia labor union is engaged in a turf war with its affiliates. Kia unionists are demanding job security through self-production of electric vehicle parts in response to the management's Plan S. When Hyundai Mobis recently announced that it will set up an electric vehicle parts plant in Pyeongtaek, Kia's labor union asserted that the plan will result in sweetheart deals among group affiliates.
The labor union of GM Korea which froze wages for two years after undergoing a restructuring in 2018 is claiming that it is a lie that GM Korea is struggling. It argues that unionists should receive what they deserve this year. GM Korea posted a cumulative deficit of 4,444.7 billion won from 2014 to 2018 and a net loss of 320 billion won in 2019.