Hyundai Motor Labor and Management Reach Tentative Agreement After 111 Days of Talks: 400% Performance Bonus Plus 12.7 Million Won

100,000 Won Base Salary Increase and 15 Company Shares Granted
Block on Expansion of Wage Peak System; Ongoing Talks on Reinstatement of Dismissed Workers
Union to Hold Vote on Tentative Agreement on August 31

The management and labor union of Hyundai Motor Company have reached a tentative agreement on this year's wage negotiations after 111 days of talks and a strike that lasted for 60 hours.

On August 24, from the afternoon, the management and union held their 17th round of negotiations in the main building’s companion room at the Ulsan plant, and announced that they reached a tentative agreement in the morning of August 25. This comes 111 days after the initial meeting on May 6.

Members of the Korean Metal Workers' Union are performing at the joint strike rally for the automobile industry held in front of Hyundai Motor Company headquarters in Seocho-gu, Seoul on the 21st. Photo by Yonhap News

The tentative agreement includes an increase of 100,000 won in the base salary (including step raises), a performance bonus of 400% of last year's amount and 12.7 million won, 15 shares of company stock, and 500,000 won in Hash Points (welfare points). In addition, summer vacation pay will be raised by 200,000 won from the previous 800,000 won to 1 million won.

This surpasses the offer made by management during the 15th round of talks on July 8, which consisted of an 89,000 won base salary increase, 350% performance bonus plus 10 million won, and 15 company shares. The newly agreed package is 11,000 won higher for the base salary, 50% higher for the performance bonus, and 2.7 million won more than the previous proposal.

Previously, the union demanded a 149,600 won base salary increase (excluding step raises), a performance bonus equivalent to 30% of last year's net profit, and an increase in bonuses from 750% to 800%. Additional demands included extension of the retirement age, the hiring of new employees, reinstatement of dismissed workers, and the resolution of issues related to damages and asset seizures.

Expansion of employment was also a key part of the tentative agreement. The labor and management agreed to hire a total of 500 new skilled workers—200 for the second half of 2027 and 300 for 2028.

Hyundai Motor is currently undertaking a reorganization of its domestic factories, including the reconstruction of Ulsan Plant 1 and Line 42. As a result, a large-scale reshuffling of current workers is planned for next year, making it a difficult environment for new hiring. Nonetheless, the labor and management agreed to the new recruitment in recognition of their social responsibility to create jobs.

Regarding extension of the retirement age, the two parties agreed to preemptively block the expansion of the wage-peak system in the future legislative process. When retirement age legislation is implemented, normal retirement extension will be applied without expansion of the current wage-peak scheme. The company also agreed to seek a shift in stance and engage in forward-looking discussions on the issues of reinstatement of dismissed workers, damages, and asset seizures.

In addition to improving wages and working conditions, both sides agreed to work together on the transition to future industries. Recognizing that introduction of future technologies such as physical AI and robotics is essential for corporate survival, they agreed to transparently share the progress on new businesses and related technologies.

They also pledged to break away from conventional manufacturing-centered practices, enhance adaptability to change, review and improve systems, and jointly strengthen productivity and manufacturing competitiveness.

This year’s negotiations were marked by significant pain due to the union's high-intensity strike action. Beginning with a partial strike on July 13, the union conducted a total of 15 strikes amounting to 60 hours. On August 21, in particular, it held a full-scale eight-hour strike for the first time in 10 years since 2016.

This led to not only disruptions in vehicle production and wage losses, but also increased burdens on parts suppliers. Due to the nature of shift work, the actual stoppage time for the production lines amounted to 120 hours. Based on Hyundai Motor’s output per hour last year (460 units) and the average sales price per vehicle (42.65 million won), cumulative production shortfalls reached approximately 55,200 units, with estimated sales losses totaling 2.3 trillion won.

Labor and management went ahead with constructive negotiations, sharing the view that escalation of losses had to be stopped and that it was necessary to conclude negotiations for the sake of the company’s competitiveness, cooperation with suppliers, and recovery of the local economy.

A Hyundai Motor official stated, "We sincerely apologize for the concern caused to shareholders, customers, and parts suppliers as a result of the prolonged negotiations and strike. Now that a tentative agreement has finally been reached, we will make every effort to quickly recover from the impact of the strike and respond to our customers' support by resuming production and launching new models in the second half of the year with top global mobility quality."

The union will hold a vote of all members on the tentative agreement on August 31. If it is approved by a majority, Hyundai Motor’s wage negotiations for this year will be finalized.

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