Following the breakdown of wage negotiations last week, Hyundai Motor production workers started a three-day partial strike on Monday by leaving work two hours early. South Korea is Hyundai's manufacturing hub, producing about half of its worldwide sales each year. The country builds more than 1 million export vehicles every year.
The union has a history of labor activism, including a series of partial strikes in past years that have occasionally escalated into full work stoppages.
Hyundai has experienced labor conflicts before; last year a similar rolling strike lasted 16 hours and resulted in a production shortfall of about 7,000 vehicles, costing the company over 300 billion won in lost revenue. The current negotiations are particularly tense as the union seeks to protect jobs from the company's automation plans.
The union is demanding a base-pay increase of 149,600 won ($100) and a regular bonus of 800% of monthly pay, up from 750%. They also want the retirement age raised from 60 to 65. Hyundai offered a base-pay increase of 89,000 won, along with a performance bonus structured as 350% of monthly pay, an additional 10 million won, and 15 shares.
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According to Yonhap News, each hour of production downtime represents an estimated 18.7 billion won in lost output.
The union's main demand - a performance bonus equal to 30% of Hyundai's consolidated net profit from last year - gained steam after Samsung Electronics and SK Hynix paid huge bonuses to chip workers. Those bonuses came from profits driven by artificial intelligence. Hyundai workers want the same kind of reward.
But there is another reason for the tension. Employees at Hyundai Motor are at the forefront of automation and the emergence of humanoid robots. The automaker intends to use its Atlas humanoid robot in American plants to handle high-volume repetitive jobs like kitting vehicle parts starting in 2028, then integrate them into more intricate assembly tasks by 2030. Union leaders are pressing management to guarantee income security through official talks before any implementation of Atlas robots, and also a full monthly salary system to protect base pay from a decline in human work hours due to automation.
The head of Hyundai's domestic production operations, Choi Yeong Il, said, "past strikes have yielded nothing but irreversible production losses, lost wages and harsh criticism from our customers and the public." Choi added that Hyundai will not make concessions or compensate for wages lost during a strike.
Hyundai's current proposal offers a base-pay raise of 89,000 won, plus a lump-sum performance bonus of 350%, an additional 10 million won, and 15 shares. Union members turned down the offer, stating that it did not meet their demands.
Union leaders plan to meet again on Thursday to decide the next steps, while behind-the-scenes negotiations with management continue. Any prolonged disruption could affect Hyundai's supply chains and dealer inventories around the world, since South Korea ships more than 1 million vehicles abroad each year.
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