Hyundai Motor reached a tentative wage pact with its South Korean labour union on Wednesday, potentially avoiding more strikes and production losses at its biggest manufacturing base.
The agreement, which is much less generous than last year’s package, is subject to a vote by about 48,000 union members on Friday, a spokesman for the company’s in-house union said.
Workers at Hyundai Motor’s plants in South Korea staged sporadic walkouts between July and August over annual wage demands, leading to a production loss of 65,500 vehicles worth 1.47 trillion won ($1.3 billion).
Under the agreement reached on Wednesday, Hyundai will increase workers’ basic monthly pay by 58,000 won; give each worker a one-off payment of 3.3 million won as well as bonus and incentives payments worth 3.5 times their basic monthly wage; and each worker will also receive 10 Hyundai shares, the company said.
Hyundai, the world’s fifth-biggest carmaker together with affiliate Kia Motors, said the union had agreed to cut bonuses this year and refrain from excessive wage rises due to the difficult business environment.
Last year the carmaker raised basic pay by 85,000 won a month, offered 20 shares per worker and bonus and incentive payments of four times the basic wage, and a one-off payment of 4 million won.
The union had threatened more strikes if there was no agreement on this year’s package, risking more damage to Hyundai, which reported its 10th consecutive drop in quarterly net profit in April-June.
The carmaker has been hit by strikes in all but four of the union’s 29-year history although it usually makes up for lost output by the end of each year.