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Hyundai Motor and South Korea union reach tentative wage deal

SEOUL – Hyundai Motor has reached a tentative wage pact with its South Korean labour union, the automaker said on Tuesday, potentially avoiding a strike and production losses at its biggest manufacturing base.

Since annual wage talks kicked off in June, Hyundai Motor’s union had insisted on a minimum basic monthly pay increase, a performance bonus, as well as an increase in the retirement age to 64 from 60.

Under the agreement, Hyundai will increase workers’ basic monthly pay by 111,000 won (S$110), and give a one-off bonus payment to each worker as well as performance-based benefits. The union demand to increase the retirement age was not accepted.

Overall, Hyundai, the No. 3 global automaker by sales with its affiliate Kia Corp, said each worker’s annual wage was likely to rise by about 12 per cent compared with the previous year

“The union and management have managed to reach a tentative deal to avoid a strike for the fifth consecutive year in the midst of risks, such as rising uncertainties due to a slowdown in the world economy, the Russia-Ukraine war as well as rising oil prices,” Hyundai Motor said in a statement.

Hyundai Motor added that it plans to adopt “hypercasting” technology as part of its strategy to improve manufacturing performance, mentioning that Tesla has adopted the same technology. Hyundai Motor said it plans to apply its hypercasting technique by 2026.

The Giga Press is an aluminium die-casting machine adopted by Tesla at its factories in the United States, China and Germany. The house-sized machines are able to produce aluminium parts far bigger than anything used before in auto manufacturing.

The deal is subject to a vote by union members next Monday, according to the union.

The union said it has put off its plans to go on a partial strike planned for this week. The strike could have cost the automaker about 5,000 vehicles in lost production, according to the estimate by Mr Kevin Yoo, an analyst at Daol Investment & Securities.

Hyundai Motor workers last went on strike in 2018. Unionised workers at Hyundai in South Korea held a four-hour strike for one day in July in support of a general strike, but it was not related to the union’s wage negotiations with the management. REUTERS

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