Workers at Hyundai Motor Co. and Kia Motors Corp. in South Korea will launch a strike action to demand for higher wages. Union spokesman Kim Gi Hyuk remarked that over 70 percent of Hyundai's 45,000 union members voted ‘yes’ to giving union leader Moon Yong Moon the authority to call for a walkout at the carmaker.
Workers at Kia also voted ‘yes’ for a strike action on Tuesday. Kim remarked that the strike may start as early as Tuesday, Aug. 20, 2013. Hyundai is already used to work stoppages as its workers have gone on strike in 22 of the past 26 years, but further walkout could further hurt the carmaker’s competitiveness against its Japanese counterparts, which have been able to trim their prices or offer higher incentives thanks to a weaker yen.
While Hyundai has posted a drop in net income for three quarters in a row, Toyota Motor Corp. is expected to log a record annual profit. Lee Sang Hyun, an analyst at NH Investment & Securities Co., remarked that if the union walks out, it would result to a worse-than-expected profit in the third quarter of 2013.
He, however, noted that it is unlikely that the strikes would continue for a long time since the union would not risk giving up their bonuses, which are given only when workers meet production targets.
Labor unions at Hyundai and Kia are seeking a pay increase of KRW130,498 ($117) a month and are demanding for 30 percent of the carmaker’s net income to be distributed to workers.
Pay discussions commenced May 28 for Hyundai, and July 2 for Kia. According to Kim, Hyundai's union will hold a meeting on Monday, Aug. 19, to set the strike schedule. He added that strikes this year are unlikely to result to stoppages of all sites like in 2012, since the union is mulling having a rotating schedule among each of the plants. [source: Bloomberg]