Hyundai Transys, which supplies key parts to Hyundai Motor Group, is facing difficulties due to a prolonged union strike. The company is experiencing difficulties in supplying parts such as transmissions due to production disruptions, causing losses at the workplace, and the union is also not receiving salaries during the strike period in accordance with the principle of ‘no work, no pay’, so both sides are suffering increasing losses.
According to recent industry sources, the Hyundai Transys union’s strike, which began demanding excessive performance bonuses that double last year’s operating profit, has been going on for nearly a month. On the 8th of last month, the Jigok Plant in Seosan, South Chungcheong Province, the largest business site of Hyundai Transys and the largest automatic transmission production base in Korea, began a partial strike and expanded to a full-scale strike on the 11th of last month, showing that the strike is getting longer and longer.
This strike is causing common damage to both labor and management. In addition to production disruptions at Hyundai Transys, workers participating in the strike are inevitably subject to wage loss under the no-pay, no-work principle. Considering the average monthly wages of Hyundai Transys production workers, the automobile industry estimates that this will result in a wage loss of about 5 to 6 million won per person.
If the union does not narrow its gap with management and stop the strike, wage losses are expected to snowball. Since Hyundai Transys is required by law to adhere to the no-work, no-pay principle, wage loss for union members is expected to be inevitable. According to Article 44 (1) of the Trade Union and Labor Relations Adjustment Act, employers are not obligated to pay wages during the period to workers who participated in industrial action and did not provide work.
Accordingly, it has been reported that workers’ complaints are pouring in due to the prolonged strike as the company has no obligation to pay wages. On ‘Blind’, an anonymous community for office workers, “Who will take responsibility if wage loss continues in November?”, “If we look at Samsung or Automobiles alone, there are no cases of workers going on strike and compensating for lost wages. It’s so difficult.”, “I’ve been stuck at home for a month.” Posts containing criticism of the union’s executive branch, such as ”I feel embarrassed for my wife and children,” and “Isn’t the new transmission line being taken away by Hyundai Motor Company’s Ulsan plant?” are continuously being posted, including concerns about wage loss, personal safety, and transfer of production volume.
A legal representative said, “Recently, commercial and labor-related laws and regulations have been strengthened, and as companies have
Hyundai Transys has been negotiating wages and collective agreements (collective wage agreements) with the Hyundai Transys Seosan Branch of the Metal Workers’ Union since last June, but the union refused to increase the basic salary by 159,800 won (excluding regular pay raises) and pay performance bonuses of 2% of the previous year’s sales. Negotiations are at a stalemate despite the demands. The total performance bonus requested by the union is approximately 240 billion won, which is twice the total operating profit of Hyundai Transys last year of 116.9 billion won. In order to accept the union’s claim, the company must not only provide all of last year’s operating profit as performance bonuses, but also borrow an amount equivalent to the operating profit from the financial sector. A situation arises where the company has to take out debt and pay performance bonuses. Performance bonuses are generally paid to workers based on business performance, but the prevailing opinion is that requesting bonuses exceeding twice the operating profit is an argument that violates common sense.
In the 20th round of negotiations on the 31st of last month, the management proposed to the union: △ an increase in basic salary of 96,000 won (including regular raises), △ management performance bonus of 300% + 7 million won, △ incentives of 100% + 5 million won (including gift certificates of 200,000 won), etc. It has been suggested.
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Interview Between Time.news Editor and Labor Relations Expert
Time.news Editor (TNE): Welcome to the show! Today, we’re diving into a pressing issue that has escalated within the automotive sector: the Hyundai Transys strike. Joining us is Dr. Kim Soo-hyun, an expert in labor relations and industrial disputes. Thank you for being here, Dr. Kim.
Dr. Kim Soo-hyun (Dr. Kim): Thank you for having me. It’s a crucial topic that requires attention.
TNE: Let’s start with an overview. The Hyundai Transys union strike has been ongoing for nearly a month now. Can you explain what led to this situation?
Dr. Kim: Certainly. The strike began over demands for performance bonuses that are notably excessive, amounting to double the company’s operating profit from last year. The union initiated a partial strike which escalated into a full-scale action quite rapidly, reflecting increasing frustration with the company’s negotiations over wages and bonuses.
TNE: That’s a significant gap between the union’s demands and the company’s capacity to fulfill them. What are some of the ramifications of this strike for both the workers and the company?
Dr. Kim: The ramifications are substantial. For the workers, while they are demanding better pay, they are also facing substantial wage losses since they adhere to the ‘no work, no pay’ principle. The average wage loss for workers is estimated to be around 5 to 6 million won per month. This has understandably led to rising discontent and frustration among employees.
TNE: We’ve seen a lot of complaints from workers aired on anonymous forums, indicating a sharp divide in opinion regarding the union’s leadership. How do you interpret this trend?
Dr. Kim: It’s indicative of a broader issue within labor movements during economically challenged times. Workers often find themselves in a precarious position where they feel torn between solidarity with the union and their immediate financial needs. The negative sentiments towards union leadership suggest a loss of confidence or concerns regarding the effectiveness of their actions.
TNE: In your view, how critical is it for the union to reach an agreement with management soon?
Dr. Kim: The urgency cannot be overstated. Without a resolution, the financial toll on workers will compound, leading not only to economic distress but also eroding trust in the union itself. Both labor and management are suffering; management faces the risk of production disruptions while the union members are grappling with wage losses. Resolving this stalemate is crucial for restoring stability.
TNE: What are some potential pathways to a resolution that you can foresee?
Dr. Kim: A constructive dialogue is paramount. Management must revisit its proposals in a way that reflects workers’ needs while remaining financially viable for the company. Perhaps there could be a phased approach to bonuses or alternate forms of compensation amidst economic constraints. Creative solutions that address both parties’ concerns could aid in easing tensions.
TNE: Lastly, what broader implications does this strike have for the automotive industry in Korea?
Dr. Kim: This situation highlights the fragile nature of labor relations within industries facing economic constraints. It serves as a cautionary tale that unresolved grievances can lead to widespread unrest, affecting not only the companies involved but also the entire supply chain. Stakeholders throughout the industry will be watching closely, as the outcome could set precedents for future labor negotiations.
TNE: Thank you, Dr. Kim, for your insights. It’s clear this situation is far from simple, and your expertise sheds light on the challenges faced by both workers and management. We appreciate your time today.
Dr. Kim: Thank you for having me. I hope the parties involved can find a way forward soon.
TNE: And thank you to our audience for tuning in. This is an important discussion, and we’ll continue to follow the developments closely.