Hyundai Motor union clashes with management over retirement age

Hyundai Motor Co.’s headquarters in Seoul. [Photo by Lee Chung-woo]

Hyundai Motor Co.’s labor union announced a four-hour partial strike for each of the upcoming Wednesdays and Thursdays as it clashes with the automaker’s management over the union’s request to extend the retirement age to 64. The union states that it will proceed with the planned partial strike if management fails to make an offer that meets their expectations during the two-day negotiations, scheduled to take place until Tuesday.

The extension of the retirement age is a key demand for the union this year. This is largely due to a decrease in the union membership rate, which has subsequently weakened the union’s influence within the company. Another reason is that the number of union members approaching retirement age is increasing due to a decline in the number of new union members. The union membership rate at the automaker stood at 74.1 percent until 2012 but has fallen below 70 percent since 2020 and is now approaching the 50 percent mark. According to Hyundai Motor, out of a total of 73,431 domestic employees, 45,751 employees had joined the union as of the end of last year, accounting for 62.3 percent.

The decrease in union membership numbers can be attributed to changes in the composition of the workforce. Hyundai Motor’s domestic workforce increased by 23 percent over the past decade to 73,431 last year from 59,831 in 2012. During the same period, the number of employees in research positions grew by 60 percent, office positions by 18 percent, and production and maintenance positions by 4 percent. The share of production and maintenance jobs among the total domestic workforce decreased to 44.8 percent in 2022 from 52.8 percent in 2012.

On the other hand, the number of employees in other job categories who are not eligible for union membership, such as advisors, fixed-term employees, and commissioned employees, increased to approximately four times their previous number over the past decade, hitting 8,209 in 2022.

Hyundai Motor has its own system for hiring “seniors” who are older than the retirement age on a contract basis. Senior contract workers are employed on six-month contracts and can work for up to one year, primarily in support roles in production lines and quality control. Approximately 2,000 production line workers retire annually as they reach the retirement age, according to the company.

The automaker’s union has the “union shop” system in place as per the collective agreement. Any new employees hired as regular employees automatically become members of the Hyundai Motor branch of the nationwide Federation of Metal Workers’ Trade Unions.

However, office-based employees at the company’s headquarters, such as those in planning, personnel, general affairs, finance, and production management, or employees in specialized departments, such as program development and system operation, are excluded from this system. Although these employees are free to join the union, the majority choose not to do so.