AP
Hyundai Motor, Union Reach Wage Deal
Tuesday September 4, 9:58 am ET
By Kelly Olsen, AP Business Writer
Hyundai Motor, Union Leaders Agree in Wage Pact That Could Avert Strike
SEOUL, South Korea (AP) -- Hyundai Motor Co. and its labor union agreed on a wage deal Tuesday, possibly averting a strike over annual salary negotiations for the first time in a decade.
Union leaders accepted Hyundai's offer of a 5.8 percent increase in basic monthly salary for each worker, an increase in the annual bonus, and a pair of separate lump-sum payments, the two sides said.
The deal is tentative and must still be voted on by the union rank-and-file. Both the union and company said a vote was set for Thursday.
Hyundai had earlier offered a 5.6 percent gain in basic salary, which the union had rejected. Workers had been seeking a hike of 8.9 percent.
The negotiations, the most recent in a series between management and the union, were held Monday and Tuesday in the southeastern industrial and port city of Ulsan, 260 miles southeast of Seoul, where the company has its main factory.
The 44,867-member union voted late last week in favor of a strike, but postponed the walkout to give negotiators more time to forge a deal. Still, it had threatened to launch a walkout Wednesday if no progress was made.
Labor unrest at Hyundai is an annual event. The union has gone on strike every year but one since it was founded in 1987. Workers have already walked off the job twice this year.
The agreement comes just two days before a Seoul court is set to rule on an appeal by Hyundai Motor Chairman Chung Mong-koo against a three-year prison term he received for embezzling company funds to set up a slush fund.
Chung, who was sentenced in February but is free on bail, is actively running the world's sixth-largest automaker, which aims to become the fifth-largest by 2010.
Hyundai spokesman Jake Jang hailed the agreement as a "breakthrough" in the often troubled relationship between the union and company.
He said it marked the first time since 1997 that the two sides had avoided a strike over the annual wage talks.
"This new labor-management relationship will greatly help boost our brand image and competitiveness in the global auto market by increasing productivity and efficiency," he said.
The union also accepted Hyundai's offer of two special lump-sum payments, one equal to about three months of basic salary and another of 2 million won ($2,130). The latter was a doubling of the company's previous offer.
Hyundai also agreed to increase its annual bonus payment for each worker to the equivalent of 7.5 months of salary, up from last year's 7 months.
The company also raised the mandatory retirement age to 59 from 58. The union had demanded it be increased to 60.
Separately, Hyundai has cut its U.S. sales target amid concerns the subprime mortgage crisis is weighing on consumer demand in the world's largest economy.
Hyundai lowered its 2007 U.S. sales target by 8.1 percent to 510,000 vehicles, Jang said.
He cited tougher competition and falling industry demand for the revision.
"Consumer sentiment is down as well because of the subprime mortgage crisis," he said.
Credit, stock and currency markets worldwide were rocked last month by rising default rates among U.S. mortgage holders with poor credit histories.
Hyundai said Monday it had cut its sales forecast for China by 16 percent to 260,000 vehicles on sluggish demand.
The automaker sold 455,520 vehicles in the U.S. in 2006 and 290,011 in China.
Hyundai sold 2.56 million vehicles worldwide last year.
Associated Press writers Jae-soon Chang and Sangwon Yoon in Seoul contributed to this report.
http://biz.yahoo.com/ap/070904/skorea_hyundai_wages.html |
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