Korean carmakers brace for labor disputes over wage negotiations

[Photo by MK DB]

South Korean finished automakers are bracing for labor disputes as their unions are set to up the ante with calls for higher wages and better benefits in upcoming collective bargaining talks this week.

According to sources on Tuesday, GM Korea and its union will meet on Thursday, but a tug-of-war is expected between the company and union as organized workers are demanding for an increase of 142,300 won ($110) in monthly basic wage plus a 400 percent bonus over ordinary pay, despite the fact that the carmaker’s production is on the decrease. The employer is already hinting at disapproval amid challenging business conditions caused by prolonged chip shortages and supply constraints. GM Korea rolled out 60,408 cars in the first quarter, down by 30.1 percent from a year ago.

Labor disputes are also expected to intensify over the carmaker’s proposed shutdown of Bupyeong Plant 2. GM Korea’s union workers are pressuring the management to arrange electric car production at the plant to avoid potential job losses. Its new chief executive Roberto Rampel made his position clear during his first official meeting with the union on Monday that the management is not considering a plan to produce EVs in Korea but rather will focus on the new models it has invested.

[Photo by Kia Corp.]

Kia is due to kick off wage negotiations with its union on Wednesday. Following Hyundai Motor, Kia’s union workers are demanding an increase of 165,200 won in monthly basic pay, allocation of 30 percent of operating profit as a bonus pay and the extension of retirement age.

Hyundai Motor has entered a second round of wage negotiations since Tuesday. The union delivered its demands to the company during the previous negotiations where they failed to iron out their differences over the terms. As the union is determined not to dwell on the timing of this year’s collective bargaining, there is a possibility that the negotiations may be prolonged, a market source said.

For Renault Korea Motors, where wage negotiations began last month, the management and the union are at odds over the cycle of collective bargaining. The carmaker recently proposed its union to conduct collective bargaining every two to three years, but the union is protesting the proposal, urging the company to accept its requirements.

Union workers are demanding to raise their basic wage by 97,472 won plus a one-time payment of 5 million won to reflect the carmaker’s swing to a profit last year, as well as a bonus pay increase to 600 percent from 500 percent.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]