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(LEAD) Unionized workers of Hyundai Motor set to vote on wage hike deal

All Headlines 15:24 August 25, 2016

(ATTN: UPDATES with reports of Hyundai Motor's China sales in last 4 paras)

SEOUL, Aug. 25 (Yonhap) -- Tens of thousands of unionized workers at South Korea's top automaker Hyundai Motor Co. will decide this week whether to accept a tentative agreement on their wage increase in a vote, union leaders said Thursday, which may decide the fate of the company as well.

The vote will be held Friday, two days after company management and union leaders reached the tentative deal.

Under the proposed agreement, Hyundai Motor workers will have their base monthly pay raised by 58,000 won (US$51.70), and receive 350 percent of their base monthly payment and an additional 3.3 million won in performance incentives.

Each employee will also end up with 10 shares of the company and 200,000 won in gift vouchers, only if the tentative deal gets the final approval from a majority of unionized workers taking part in the vote.

A rejection of the deal may spell disaster for both the company and its workers, company officials noted.

The unionized workers of Hyundai Motor have staged 14 rounds of partial walkouts since the wage negotiations began in July, causing a huge drop of 65,500 cars in the automaker's overall output.

The company officials said the company was expected to suffer 1.47 trillion won in loss of sales due to the reduced production.

Such a drop in sales in turn is expected to speed up a continued decline in the company's profits.

In 2015, Hyundai Motor posted an operating profit of some 6.37 trillion won, down 15.8 percent from 7.55 trillion won in the previous year, which also marked a 9.2 percent on-year drop from the year before.

The tentative agreement with the labor union also reflects worsening conditions for the company and its employees, the officials noted.

Under the 2015 wage deal, Hyundai Motor workers received 400 percent of their monthly salary and an additional 4.2 million won in incentives, along with an 85,000 won pay increase. Also in 2014, they received 450 percent of their monthly pay and an additional 8.9 million won in bonuses, according to the officials.

"We have long been subject to criticism from our customers as a demand for an excessive wage hike has always been at the center of wage negotiations over the past years despite top levels of wage and welfare programs already offered to workers," an official said, asking not to be identified. "The company will work to establish a culture in which wage negotiations are based on the company's performance."

Meanwhile, Hyundai Motor and its smaller affiliate Kia Motors Corp. said their combined sales in China spiked 31.9 percent on-year in July.

Hyundai Motor sold 70,016 cars last month, up 29.3 percent from the same month last year, while Kia Motors posted a 36.6 percent surge to 41,005 cars.

Their combined marked share stood at 7.5 percent, the third highest among all import vehicle brands in China after 18.1 percent of Volkswagen and 10.8 percent of General Motors.

Hyundai and Kia belong to the world's fifth-largest automotive firm in terms of output, Hyundai Motor Group.

bdk@yna.co.kr
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