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3 carmakers yet to seal 2020 wage deal amid pandemic

All News 10:44 October 13, 2020

SEOUL, Oct. 13 (Yonhap) -- Kia Motors Corp. and two other South Korean carmakers have yet to reach wage deals with their unions for this year, with the new coronavirus outbreak still a major concern for the automotive industry.

Of the country's five carmakers, Hyundai Motor Co. and SsangYong Motor Co. and their unions already signed wage deals for the year in September and April, respectively.

Kia Motors, which is 34 percent owned by Hyundai, plans to enter the seventh negotiations with its union Thursday.

Kia workers demanded the company increase the monthly basic pay by 120,000 won (US$104) per person and offer 30 percent of its annual operating profit in performance-based pay.

From January to June, Kia's operating profit plunged 48 percent to 589.62 billion won from 1.13 trillion won in the year-ago period.

The 30,000-strong union also expressed concerns about a possible reduction in workforce due to Hyundai Mobis Co.'s plan to build an auto parts plant for environment friendly vehicles.

Hyundai Mobis is a core affiliate of Hyundai Motor Group, along with Hyundai Motor and Kia Motors.

This file photo, taken April 27, 2020, shows Kia Motors' plant in Gwangmyeong, just south of Seoul. (Yonhap)

GM Korea Co., the South Korean unit of General Motors Co., has held 16 rounds of negotiations with its union since July, but they have yet to narrow differences over the size of bonuses and future vehicle allocation plans.

GM Korea workers asked the company to raise the basic pay by 120,000 won per worker, offer four months of salary as a bonus and 6 million won in cash, while demanding a new vehicle production plan at the No. 2 Bupyeong plant in Incheon, just west of Seoul, after 2022.

The union argues there should be a new vehicle to replace the Trax compact SUV and the Malibu midsize sedan currently being produced at the plant.

But the company balked at the demands, citing unfriendly business environments caused by the COVID-19 pandemic and steady demand for the Trax SUV and Malibu sedan in global markets.

The GM Korea union said it will consider going on strike unless there is progress in the 17th negotiations with the company Wednesday.

Renault Samsung Motors Corp., the South Korean unit of Renault S.A., halted its negotiations with its union late last month as it suspended its sole plant in Busan, 450 kilometers south of Seoul, to control inventories amid the pandemic.

They are expected to resume talks next week as Renault Samsung halted the operation of the Busan plant from Sept. 24 to Oct. 18.

In September, Hyundai workers accepted the company's proposal that included a freeze on basic pay, a one-off bonus amounting to 1 1/2 months of salary and 1.2 million won in special COVID-19 allowance.

It is the third time Hyundai and its union agreed on a wage freeze after the 1998 Asian financial crisis and the 2009 global financial crisis. They also reached a wage deal without a strike for the second consecutive year.

SsangYong workers agreed on a wage freeze in April as they see stable labor-management relations as the key to putting the company back on track amid virus worries.

Mahindra & Mahindra Ltd., which owns a 74.65 percent stake in SsangYong, said in August it will give up its status as the biggest shareholder of SsangYong if it finds a new investor.

This file photo taken Sept. 20, 2019, shows SsangYong Motor's plant in Pyeongtaek, 70 km south of Seoul. (Yonhap)


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