By on July 12, 2012

More than 70 percent of Hyundai’s 45,000 strong worker’s guild voted in favor of job actions, including a walkout planned for Friday. The guild is building up towards Hyundai’s first labor strike since 2008, as they seek better wages and reduced hours.

A report by Bloomberg lists the demands of Hyundai and Kia workers (who are also participating in the job action) as

a 151,696 won [$131] increase in monthly base pay [salary is around $39,000 for the average worker] and that the companies return 30 percent of net income to employees as bonuses…other demands include switching Hyundai Motor’s plants to two eight-hour shifts from the current double 12-hour rotation system…

Hyundai’s last strike in 2008 lasted 12 days and cost the company approximately 44,645 vehicles. The expanded overseas manufacturing presence of both Hyundai and Kia should help mitigate some of the damage, but a strike will still have negative effects on the steady sales growth of the two brands. While South Korean production only accounts for 46 percent of total production (down from 60 percent in 2008), overseas plants are operating at near full capacity, leaving little breathing room.

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27 Comments on “South Korean Auto Unions Gearing Up For Strike...”


  • avatar
    lon888

    If these guys go on strike, it’ll really drive up the prices on the popular Hyundai’s. Last summer I looked at a new Elantra and the “Adjustment Due to Market” was $2500. Stealerships will now probably take it up to $4000. Uh oh I think I hear them doing it now.

  • avatar
    jpolicke

    Sounds like they have no overtime laws there. How far does $39000 get you in S. Korea? It sounds like pretty good money for what I thought was a low cost-of-living country.

    • 0 avatar
      tresmonos

      South Korea isn’t as cheap as you would think. I believe the last time I looked, cost of living in Ulsan was around 10-15% cheaper than the region around their massive West Point, GA plant.

    • 0 avatar
      28-cars-later

      A COLA raise doesn’t seem unreasonable but 30% of net income as bonuses seems a bit lofty, maybe I’m out of touch.

      • 0 avatar
        don1967

        Muscling in on corporate profits, while assuming none of the risk of financing and operating the business, is what unions do.

      • 0 avatar
        supersleuth

        No problem, just as soon as managers can figure out to make cars without workers, they can pocket ALL the money. But until then…

      • 0 avatar
        Robert Schwartz

        Super: They have been working on it for years. And every year they get a little bit closer.

        And the progress has been quite substantial. Engine plants are now run with one third of the labor they were run with 30 years ago.

      • 0 avatar
        supersleuth

        They’re not there now, though, nor even all that close. So guess what, they still have to deal with workers, whether they like it or not. Even Chinese wages are creeping up.

      • 0 avatar
        bikegoesbaa

        They haven’t figured out how to build cars without workers, but they have figured out how to build cars without *union* workers.

        Step 1: Build plant in the American south. You will probably have states and cities courting you with tax breaks and incentives.

        Step 2: Staff up with the pick of the local labor pool, paying more than they would make elsewhere but less than they would make in an old-school union facility.

        Step 3: Build good things and sell them for a profit. Treat your workers well and they’ll keep the unions out for you.

        This approach seems to be working well for Hyundai, Nissan, VW, Mercedes, BMW, Honda, and Toyota; and appears to be the plan for Boeing and Airbus going forward.

      • 0 avatar
        supersleuth

        And they still have to pay those non-union workers well enough that they’re not motivated to organize. Unions help unorganized workers a lot more than many people realize. The latter would end up being very sorry if the unions went away altogether.

      • 0 avatar
        28-cars-later

        Even if wages are due and get a boost, with the proximity of China to Korea and the fact GM has existing huge operations in China, don’t the Korean unions ever think they are doing themselves a disservice by stirring up trouble? Couldn’t you just see GM saying to hell with Daewoo and moving all of its operations to China if the unions keep it up?

      • 0 avatar
        charly

        Business loves giving a low salary and a high bonus.

        The first reasons is taxation. Bonuses are often less taxed, need less social security or pension payments.
        Second reason is that if they are real bonuses and depend on results(unlike those of CEO’s) they correlate with how well a firm is doing. If a firm is doing badly it has to spend less on wages.

        So Don1967, you are wrong with bonuses. They are used to let the workers solder part of the risk of operating the business

      • 0 avatar
        don1967

        @super,

        Drop the Marxist hyperbole, please. Management is not asking to pocket “all” the money; they are quite willing to pay the workers the agreed-upon pay for the agreed-upon services they provide. And workers for the most part are willing to honor this deal, at least when they are not being seduced by Union Corporate.

        What we’re talking about here are opportunists – people who did not assume any financial risk in the building of a business – seizing the rightful profits of those who did. You can band together and steal from the rightful owners for awhile if you want to, but in the long run you are only killing the goose that lays your golden eggs.

        @charly, nice try but I’ve never seen a bonus structure that took money out of a worker’s bank account or repossessed their home. This is a risk which only owners face.

      • 0 avatar
        charly

        Not getting 30% of you normal yearly income is a lot harder than losing your second home

    • 0 avatar
      bd2

      The average salary in SK is around $32k and considering that 60% of the population lives in the greater Seoul metro area, $39k for living in lower cost Ulsan is pretty good, and that’s only taking into account base pay.

      Back in 2006, a Hyundai worker w/ 26 years experience was making $65k, so one could do quite well working at Hyundai.

      Actually, a bit surprised that they went 4 years w/o a strike.

  • avatar
    Detroit-X

    In a way, I say good for them. The internet tells them what the US and Germany pay their union people, and the benefits they get. It’s only a matter of time before the wages equalize globally. You can fool some of the people, some of the time…

    • 0 avatar
      don1967

      The only workers being fooled are those North Americans and Europeans who still think they are entitled to financial security when things are bad, and full partnership in their employers’ business when things are good. For them, “global equalization” of wages is going to be a nasty wake-up call.

      • 0 avatar
        supersleuth

        I’m guessing that you think YOU are a lot more irreplaceable than you actually are. (If you’re a business owner, you also may not have spent quite enough time thinking about how your customers are supposed to buy your stuff if they don’t have any money.)

      • 0 avatar
        Detroit-X

        Although I didn’t make that point clear, that’s part of what I’m saying.

      • 0 avatar
        highdesertcat

        Detroit-X makes an excellent point. These South Korean Auto Unions have the UAW as their role model and they saw for themselves how the UAW killed the US auto industry and actually profitted from that when the US government bailed them out along with their bankrupt employers.

        And on top of that the unions were given a chair at the table AND a part-ownership in the company. With an example like that, how can we possibly blame these unions for wanting the same gains for themselves?

        Hyundai/Kia and GM will give these unions whatever they want so as not to upset the applecart of North American operations. I would call that prudent strategy on the part of the unions. The end justifies the means.

    • 0 avatar
      tresmonos

      detroit-x,
      That will never happen in anyone’s (who is alive) lifetime. Unless Mexico all of a sudden becomes a great place to live and half of China’s population disappears.

      As for all the direct labor commentary: I’m under the age of 30, have been laid off once already and am working diligently to leverage a plant in Mexico. Sure, my life will suck for the next year, but I’ll have a job. I can see the overhead cost differences between the 2 US, 1 Canadian and 1 Mexico plant I have been associated with, and while there are still advantages for everything north of the border (certainly not overhead), the gaps are quickly narrowing. Global programs are extremely difficult to keep on track, but OEM’s are getting better at it every single day. Once that gap narrows, you’ll see the same cooperation/flexibility Twin Cities displayed when they were on death row.

      • 0 avatar
        Detroit-X

        That depends on the industry, and how closed-minded the US execs are at doing things here vs. overseas. There already have been reports of manufacturing coming back here because of non-wage problems, so the equalization of wages is just one more reason.

  • avatar
    el scotto

    I’m thinking water cannons, fist fights, and sound bites.

  • avatar
    don1967

    How strange that Hyundai Alabama has a relatively happy, non-unionized labour force while Hyundai Korea does not. Is this explained by a difference in corporate culture between the two continents, or a difference in social culture?

    • 0 avatar
      Detroit-X

      I bet part of it is Alabama doesn’t have a bunch of preexisting, self-serving, short-sighted, union leaders with a perpetual list of reasons why the workers should feel unhappy.

      • 0 avatar
        carbiz

        The Alabama plant has only been open 7 years. Not enough time for workers to feel secure and start bitching.
        All was hunky dorey at the Honda Alliston plant for the first 10 years, too…. eventually, it’s human nature to want more and to bite the hand that feeds you.


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