Hyundai Motor Labor and Management Return to Negotiations on the 18th... Pivotal Moment for Second-Half Performance Rebound

Hyundai Motor Union to Suspend Strike on the 18th After Accepting Management’s Request to Resume Talks
Focus on Whether Labor-Management Standoff Will End Ahead of New Model Launches

Hyundai Motor's management and labor union will return to the negotiation table after about a month. The labor union, which had escalated strike actions following the summer holidays, accepted management's request to resume talks, and both parties have agreed to restart main negotiations at 2:00 p.m. on the 18th. The previously planned six-hour strike will be put on hold.

With negotiations resuming, there is attention on whether this could break the prolonged deadlock over the wage and collective bargaining agreement. Notably, this year's strikes have already caused production disruptions of more than 40,000 vehicles, and with the company counting on a rebound in performance with new model releases in the second half of the year, the results of the talks on the 18th are expected to become a pivotal moment for Hyundai Motor's management for the remainder of the year.

On the 12th, morning shift workers at Hyundai Motor Ulsan Plant's Myeongchon Main Gate in Buk-gu, Ulsan, left work early due to a four-hour partial strike. The Hyundai Motor Union will continue to strike for 4 to 6 hours daily from this day until the 18th. Yonhap News

According to the Hyundai Motor labor union on the 15th, the union decided on the 14th to accept management's proposal and will hold main negotiations at 2:00 p.m. on the 18th. On the 14th at around 2:30 p.m., Hyundai Motor CEO Choi Youngil personally visited the union branch to request the resumption of negotiations.

Accordingly, the union will suspend the strike that had been scheduled for the 18th in accordance with the directive from the Central Strike Countermeasure Committee and will resume normal work. After the negotiation on the 18th, the committee will hold its sixth meeting to discuss future strike schedules.

However, the resumption of negotiations does not immediately mean the conflict has been resolved. Hyundai Motor's management and union have not held a main negotiation session for more than a month since the 15th round of negotiations on the 8th of last month. The union is demanding a base wage increase of 149,600 won, performance bonuses equivalent to 30% of last year’s net profit, a raise in bonuses to 800%, an extension of the retirement age, and rehiring of dismissed employees.

Management, at the third round of proposals on the 8th of last month, suggested a base wage increase of 89,000 won, a performance bonus of 350% plus 10 million won, and 15 shares of company stock; the union rejected this offer. The union has maintained a hard-line stance, stating that management’s offer does not meet members’ expectations. In a newsletter published on this day, the union once again emphasized the need for wage increases, comparing company performance with member compensation levels.

The union has raised the issue of the CEO's responsibility, claiming that management’s failure to properly lead negotiations has worsened the situation. In contrast, management argues that it cannot ignore the growing production disruptions and revenue losses brought on by the protracted strike, and there remains a significant gap between the parties’ positions.

As the conflict drags on, production disruptions have snowballed. The Hyundai Motor labor union held two-hour partial strikes by work group from July 13 to 15, followed by four-hour strikes daily from the 20th to 22nd and again from the 29th to the 31st. With Saturday overtime work also being refused, the total number of vehicles affected by production disruptions due to this year’s strikes has reached 42,510 so far.

For Hyundai Motor, restoring normal production is more important than ever to achieve a rebound in performance in the second half of the year. The company is pinning its hopes on the effect of new model launches and expanded sales to recover from a sluggish first half, but should the strike prolong any further, delays in producing and delivering new vehicles on time are inevitable. Additional production disruptions would be especially burdensome as the company aims for improved performance through strong sales of major new models, including the new Avante, in the latter half of the year.

The labor-management risks persist throughout the Hyundai Motor Group. Unlike Hyundai Motor, Kia has continued talks without a strike, but the union has secured the legal right to strike, so the outcome of negotiations could change the situation at any time.

During the eighth main negotiation session held on the 13th, Kia management made its first offer, which included a base wage increase of 93,000 won, a performance bonus of 350% plus 11 million won, and 45 shares of company stock. This is higher than Hyundai Motor's proposal of an 89,000 won base wage increase, a 350% performance bonus plus 10 million won, and 15 shares.

While the Kia union is demanding an improved offer, discussions are ongoing without strikes or the refusal of overtime so far. Should Kia achieve a strike-free settlement this year, it would mark the sixth consecutive year of such an outcome since 2021. Moreover, if Kia is able to reach agreement on the collective bargaining and wage deal before Hyundai Motor—currently bogged down in lengthy negotiations—it would be the first reversal in the order of settlements between the two companies in 15 years, going back to 2011.

Tensions are also rising at Hyundai Mobis. On the 12th, the labor union of Hyundai Mobis subsidiaries filed for mediation with the National Labor Relations Commission and began procedures to secure the legal right to strike. The action covers 25 union branches in 12 regional chapters of the Korean Metal Workers’ Union, including Motras and Unitus—Hyundai Mobis subsidiaries—and involves 7,375 union members.

The Korean Metal Workers’ Union has also announced a joint strike across the automotive sector from the 20th to the 21st. Parts suppliers with the legal right to strike will conduct at least four-hour strikes per shift on the 20th, and completed automobile plants will undertake at least six-hour strikes per shift on the 21st. With labor conflicts spreading beyond Hyundai Motor to key group affiliates and suppliers such as Kia and Hyundai Mobis, it is possible that disruptions could expand across the entire group.

Ultimately, the main labor-management negotiations at Hyundai Motor on the 18th are poised to become the first major inflection point for labor relations in the second half of the year. If substantial progress is made during the talks, this may serve as a turning point to halt further strikes and restore normal production. Conversely, if negotiations fall through once again, the union may escalate strikes further, and the number of vehicles affected—already surpassing 40,000—may increase even more.

This content was produced with the assistance of AI translation services.