Will Hyundai Have Labor harmony?

24/12/2009

Share investors welcomed an agreement by Hyundai Motor’s unionized workers to accept a

wage deal, ensuring that 2009 will be the first strike-free year in 15 years for South Korea’s
largest auto company. Hyundai shares hit a record high after the union said on Dec. 24 the
majority of its 45,000 members voted to support an uncertain deal reached between the union
and management three days earlier.

The agreement is yet another success for Hyundai which is widely expected to report a record
profit this year. Hyundai has been a source for labor strikes in Korea, with its union, the
countries largest, going on strike every year except for one since it was set up in 1987. Today,
investors pushed Hyundai’s stock 3.9% higher, extending year-to-date gains to a remarkable
206%.

Under the wage plan, basic salaries will remain frozen while the company will make a one-time
payout of the equivalent to three months of average salary and 40 Hyundai shares to workers.
Hyundai’s new union leader Lee Kyung Hoon has refrained from involving his union in labor
conflict linked to political issues such as a free trade deal since his election last September.
Investors will certainly welcome Lee’s leadership if Hyundai can continue to avoid output
disruptions due to labor disputes next year.

Reader Comments
DanTe

December 24, 2009 03:21 PM

Move some production out of Korea and the militant unions will start to learn. If not, just move it
all out of Korea. Wait until the union imbeciles starve to death. Then bring back the production.
Repeat as needed - depending on how slow in the head these workers are.

Strategery

December 25, 2009 02:57 PM

Wrong again, DanTe. Hyundai has record profits AND a strong union... They do well because
they make good vehicles at great prices. I blame management and poor government policies
(specifically trade) for the demise of US automakers...

C. H. Ng

December 25, 2009 08:54 PM

S. Korea is one of the few countries famous (or infamous) for their labor strikes. A strong labor
union is both good & bad primary to the workers but one strike too many is bad for the
companies which employ them as it will affect greatly on the productions & profits. A loss
making company will not be able to pay well or take care of her workers & ultimately it's the
latters who will suffer more. So why rock the boat if it's sailing smoothly?

LadyRebel55

December 25, 2009 11:25 PM

We only have a Sonata building factory in America. We need more jobs here. Hyundai would be
very welcome in the U.S. I agree with DanTe. We lost our jobs to lower priced workers overseas.
Now the tables are turning.