South Korean Hyundai Workers Didn't Strike This Year!
After eight consecutive years of striking, South Korean Hyundai employees decided to take a season off. Preliminary reports are indicating that the workers’ union has reached a tentative wage agreement with the automaker, resolving any need to picket.
Top-notch negotiating skills likely played a role, but union members also noted that it was best not to temp fate. According to Reuters, the group said it had considered “the uncertain political and economic situation” before agreeing to terms. That’s a reference to the degrading political situation between South Korea and Japan, as well as the ongoing Sino-American trade war.
While we’ve routinely covered the trade war, the diplomatic situation between South Korea and Japan falls mostly outside the purview of automotive news. In 2018, South Korea demanded damages from Japanese companies that engaged in forced labor during World War II. Convinced it has placed its historic misdeeds behind it, the Land of the Rising Sun said that matter had been settled in the decades following the war.
Obviously, relations did not improve. This year, Japan deiced to impose export restrictions on materials essential in the manufacturing of semiconductors — which is a big deal for the nation Samsung and LG call home. It also removed South Korea from its list of trusted trade partners. In response, Seoul terminated its intelligence-sharing pact with Tokyo and started conducting military drills around a series of islands controlled by Korea by claimed by Japan.
That, in addition to complications stemming from the trade war between the United States and China, has been dimming South Korea’s economic outlook.
Hyundai said the deal was reached to ensure both employees and the company could survive into the future. “We have focused on escaping social isolation,” the South Korean union said in a statement.
From Reuters:
Under the latest wage agreement, each unionized worker will receive a one-off payment of up to 9 million won ($7,414), an additional payment equivalent to one and a half months’ salary, 15 Hyundai Motor shares, and a basic salary increase of 1.74 percent.
The basic salary increase is the lowest since at least the 2009 global economic downturn.
Hyundai’s unionized workers in South Korea have staged strikes in all but four years since the union was created in 1987. But the union has faced growing public and media criticism for walking out of wage talks despite workers’ relatively high pay and at a time of economic slowdown.
The labor agreement is subject to final approval from union members in a vote on Monday but it already looks like a done deal.
Taking a moment to enjoy the silver lining, unionized employees still got some cash and Hyundai’s domestic sales are expected to improve in the short term as Koreans boycott Japanese automobiles due to the degrading political situation. Export numbers are also on the rise in the West thanks to the company expanding its portfolio to include more crossover models. Hyundai’s grip on the U.S. market loosened in 2017 and 2018, but 2019 is shaping up nicely. While the same cannot be said for the Chinese market, Europe has remained relatively stable through the first half of the year.
[Image: Hyundai]
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"Top-notch negotiating skills likely played a role" Having done business with Koreans, I can tell you "top notch negotiating skills" are a minimum requirement. Toughest deal I ever assembled.
My wife is Korean, came to US 25 years ago. While we currently have 2 Hondas and 1 Toyota in our stable, and they have been 100% reliable, she says will not accept a Japanese branded vehicle as replacement of her Odyssey. Says Japan has never taken responsibility for their atrocities in WW2, and is boycotting. Very much in tune with her homeland, although she hasn't lived there for decades. She will accept a German car, as they have been more forthcoming in admitting fault and of course they weren't in Asia. But her current first choice is a Hyundai Palisade. We'll look at the 2020 Explorer and VW Atlas as well. She was initially attracted to the MBZ GLS, but now says she likes the look of the Palisade better. I am happy to save 35K with a Palisade so not complaining. I would prefer another Ody, as vans are super convenient but she's had one for 15 years and is very much done with them and of course even tho made in Alabama, she views as Japanese car.