Tire Production Suspended at Plants in Daejeon, Gumsan
Hankook Tire & Technology and its union have ended their 59 years of strike-free settlement of wage negotiations.
The union went on strike beginning from 6 a.m. on Nov. 24 following the breakdown of their wage and collective bargaining negotiations with the management. As a result, tire production (70,000 units a day) was suspended at the company's plants in Daejeon and Geumsan, South Chungcheong Province. This marked the first strike since the union's establishment in 1962.
Hankook Tire & Technology’s labor and management had had negotiations since August, but failed to narrow their gap over a pay raise. The union reportedly demanded a 10.6 percent raise in their basic salary and the abolition of a retirement age extension-linked wage peak system, but the management proposed a 5 percent increase, five million won in incentives and an increase in the wage peak rate.
Hankook Tire & Technology posted a year-on-year drop of 19.5 percent in operating profit in the third quarter of 2021 due to a shortage of automotive chips, logistics problems, and rising raw material prices. In particular, the company's plants in Korea saw their sales descend by about 7.6 percent on year and their operating income turn into a deficit.