Hyundai Motor Co. (005380)’s workers are boycotting their extra weekend shifts today after they failed to come to an agreement with management over wage demands for a third straight year.
Workers at South Korea’s biggest carmaker have decided not to take part in any additional duties until a settlement is reached, Hwang Ki Tae, the spokesman of the company’s union, said in a text message. Today’s strike is estimated to cut sales by 70 billion won ($69 million), Yonhap News reported, citing an unidentified company official.
“The strike itself is likely to have a negative impact on investor sentiment,” Lee Jin Woo, a Seoul-based fund manager at KTB Asset Management Co., which oversees about $7.9 billion, said by phone today. “While the impact is expected to be limited compared with the past, it now really depends on the scale of the strike.”
The union’s walkout threatens to cut output at a time when a strengthening won erodes profits from overseas for the nation’s automaker. Workers at the company are demanding that management count bonuses as part of their base wages.
The union said it staged a partial strike yesterday as a “warning” and will boycott any extra shifts in the future, according to a posting on its website. The union and management plan to hold their next negotiations on Aug. 26, it said.
South Korea’s won has strengthened 3.2 percent against the dollar this year to 1,017.7 as of Aug. 22. Hyundai Motor’s share has dropped 5.1 percent so far in 2014 to 224,500 won.
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