Hyundai Motor’s labor-management wage negotiations have led to strikes for the second consecutive year. The Hyundai Motor union of the Korean Metal Workers’ Union went on a partial strike for two hours a day from the 13th to the 15th.
Production lines at the Ulsan plant, where about 20,000 union members work, as well as at the Jeonju and Asan plants, were temporarily halted. Based on production lines, up to four hours a day and a total of 12 hours over the three days were stopped. The industry estimates that the strike could cause production disruptions of about 5,000 vehicles and sales losses worth about 200 billion won. The production interruption cost per hour is calculated at more than 18.7 billion won.
The labor and management had held 15 rounds of bargaining through the 8th but failed to find common ground. Behind-the-scenes talks are continuing, but if there is no progress, there is a possibility that additional strikes will be decided at the Central Strike Countermeasures Committee on the 16th.
The strike process was set in motion last month. After declaring a breakdown in negotiations, the union went through mediation by the National Labor Relations Commission and approved a vote on industrial action on the 24th of last month. The approval rate reached 92% of those who voted. On the 15th, when the union federation’s general strike rally is held, the union is reportedly considering extending strike time to more than four hours per work shift.
◆ Wage gap compounded by reinstatement and retirement-age issues
The first reason the talks have derailed is the wage gap. The union is demanding a basic wage increase of 149,600 won, excluding seniority-based raises, as well as bonuses equal to 30% of net profit and a 800% increase in bonuses. At the 15th round of bargaining, management presented its third proposal, offering a basic wage increase of 89,000 won, performance pay of 350% plus 10 million won, and 15 company shares, but the union rejected it, saying it fell short of expectations.
Issues outside wages are also escalating the conflict. The two sides remain at an impasse over the reinstatement of union members dismissed for illegal acts during past union activities and over demands to extend the retirement age. Hyundai Motor CEO Choi Young-il said in a statement on the 10th, “It is regrettable to strike over issues such as reinstatement of dismissed workers and extending the retirement age,” while the union countered that the company was shifting responsibility for the strike onto the union.
Differences in how the business environment is perceived are also cited as a background factor. The company says it has limited room to maneuver, pointing to last year’s decline in operating profit, weak sales in the first half of this year, and tariff burdens in the United States.
The union argues that a real wage increase is necessary in light of inflation. Variables such as the yellow envelope law changing bargaining dynamics between prime contractors and subcontractors, and job insecurity caused by the introduction of AI and robots, have made this year’s negotiations more complicated than usual.
◆ The six-year no-strike streak showed the settlement formula
Hyundai Motor and its union have not only repeated conflict. From 2019 to 2024, the two sides recorded six consecutive years of no-strike settlements for the first time since the company’s founding. Repeatedly, the formula was to trade contentious issues for other concessions.
In 2022, an agreement was reached when management agreed to build a domestic dedicated EV plant in Ulsan with a 2 trillion won investment and to establish a regular quarterly labor-management consultative body. It was a case of securing the union’s demand for employment stability with a promise of future investment.
In 2024, the deal included a basic wage increase of 112,000 won, performance pay of 500% plus 18 million won, and at the time the largest wage package ever, as well as extending the post-retirement reemployment period from one year to two years and hiring 800 additional skilled workers. It was a compromise that bypassed the demand to extend the legal retirement age by expanding reemployment without touching the statutory retirement age. The provisional agreement was reached just two days before the planned strike date.
Even after a strike began, there was still an exit path. Last year, the union staged a partial strike for the first time in seven years, but later resolved the wage and collective agreement negotiations after combining partial strikes with intensive bargaining. In other words, a strike did not necessarily lead to a prolonged standoff.
◆ There is already common ground; the 16th is the turning point
There are already stepping stones in this year’s negotiations. The labor and management have agreed to jointly study the introduction of a full monthly salary system and operate a task force, and they have also agreed to jointly respond to the introduction of new technologies such as physical AI and robotics. They have also made progress on increasing skill-up allowances for core technical positions and improving allowances. In terms of issues other than total wage compensation, a trade has already effectively been struck.
Looking at past settlement formulas, the remaining tasks are clear. The analysis is that the way to resolve the dispute is to narrow the wage gap through additional proposals, while issues tied to law and principle, such as retirement age and reinstatement, are repeatedly proven solvable through alternative cards such as expanding reemployment or promising job security.
Since the union has not closed the door on negotiations and management has also expressed its intention to reach an early settlement, whether a compromise emerges through intensive bargaining before the strike committee meeting on the 16th is expected to be the key turning point this week.
The cost of a prolonged strike falls on both labor and management. At a time when tariffs and weak sales are overlapping, production disruptions hurt the company’s earnings, and deteriorating earnings in turn reduce the pool for performance bonuses. Whether the second consecutive strike ends in three days or expands further is expected to be decided at this week’s bargaining table.