Placing Top Priority on Job Security
Hyundai Motor's labor and management have frozen wages for the first time in 11 years and concluded wage negotiations without a strike for two consecutive years since 2019. The carmaker’s labor and management saw eye to eye on working together to overcome the crisis caused by the COVID-19 pandemic.
Hyundai Motor's labor union announced on Sept. 26 that about 53 percent of the union members who participated in a vote in the previous day accepted the tentative agreement on wage negotiations for 2020. The agreement stipulates a freeze on wages (basic salary) and a 150 percent bonus, 1.2 million won in incentives, 10 Hyundai Motor shares, and 200,000 won in gift certificates for use at traditional markets. It is the first time in 11 years that the company’s labor and management agreed to freeze wages. It is the third wage freeze in the company’s history, with the previous two made in 1998 and 2009.
The union's decision is attributed to a sense of crisis kindled by the COVID-19 pandemic. Hyundai's first-half operating profit fell by 29.5 percent from 2019. During the first eight months of 2020, car sales dipped 21.4 percent compared to the same period of 2019. Analysts say that a consensus has been formed among unionists to protect jobs first.
Global carmakers such as GM of the United States, Renault of France, and BMW of Germany started to reduce their workforces by tens of thousands. This also exerted influence on the union. During the negotiations, Hyundai Motor's labor and management agreed to maintain domestic auto output at more than 1.74 million units per year and make efforts to stabilize workers’ job security.
Hyundai Motor's wage freeze, which followed no wage hike at Mando and POSCO, is expected to affect collective bargaining not only in the automobile industry but in the industry as a whole.