Hyundai Motor Co. workers went on full-scale strikes on Monday for the first time in more than a decade, bringing operations at three South Korean plants to a standstill at the same time.
About 50,000 union members at South Korea’s largest automaker participated in the strikes as the union and management failed to make progress on resumed wage talks after workers voted against a tentative wage deal reached last month. Hyundai’s shares fell 1.4% to 140,000 won as of 10:16 a.m. in Seoul trading, compared with a 0.1% decline in the benchmark Kospi Index.
“While we are obviously disappointed with any temporary stoppage in production, we still continue to work with our labor union to resolve this issue as quickly as possible," Hyundai Motor (IW 1000/37) said in an e-mailed statement.
The full-scale strikes at Hyundai’s plants in Ulsan, Jeonju, and Asan, are the first since 2004. Workers will continue partial strikes throughout this week, the union said in a text message. The union has said that many of its members felt the wage benefits were less generous than last year’s package.
The labor problems add to Hyundai’s efforts to reverse 10 consecutive quarters of profit declines as it strives to avoid missing its sales target for a second straight year. Hyundai’s domestic demand plunged by 18% in August from a year earlier and by 20% in July, according to regulatory filings, hit hard by the loss of production and the expiration of a local tax cut on new car sales.
A series of partial strikes that started in July has led to a production loss of about 100,000 cars with a value of more than 2.2 trillion won as of Sept. 23, according to the company.
By Sohee Kim