Hyundai Agreement Peaceful But Painful

Labor peace may have been achieved without any violence in the 36-day strike by 26,000 auto workers against the Hyundai Motor Co., but the price might have been costly for both Hyundai and other South Korean companies.

The reason: Because the union did not use the government-required mediation process before striking, it opens the door for other union workers in South Korea to bypass that process and use strikes as economic leverage to block layoffs.

The agreement reached Aug. 24 calls for Hyundai to rescind the July 20 layoffs of all but 277 workers. The remaining 1,261 workers who had been laid off will instead be placed on 18-months of unpaid leave and given six months of job retraining. The strike at the plant near Ulsan cost Hyundai nearly $700 million in lost production.

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