Hyundai Motor Co. reached a preliminary agreement with its South Korean union to raise wages, paving the way for the end of a strike that’s resulted in an estimated 1 trillion won ($910 million) in lost output.
Under the agreement, which is subject to a vote by the Korean carmaker’s 46,000 union members on Sept. 9, the company will raise the average base salary by 5.1 percent, Seoul-based Hyundai Motor said in a statement yesterday. The automaker also agreed to pay a one-time bonus equivalent to 3 1/2 months of wages plus 5 million won, it said.
Workers have staged partial walkouts since Aug. 20, causing what Hyundai Motor estimates to be more than 50,000 vehicles in lost production. South Korea’s largest automaker, which has seen profit fall for three straight quarters, is grappling with increased competition as a weaker yen gives Japanese carmakers an edge in the U.S.
Hyundai Motor rose 2.3 percent to 249,500 won at 11:13 a.m. in Seoul trading. The benchmark Kospi index increased 0.2 percent.
The union refused extra work for 13 weekends beginning March 9, demanding higher compensation on those shifts. The stoppage, although not a legally sanctioned strike, cost Hyundai 1.7 trillion won in lost production, according to the company’s estimates.
Hyundai estimates that labor disputes have caused missed production of more than 1.2 million vehicles and lost sales worth 13.3 trillion won before this year. Workers have gone on strike in 23 of 27 years since the union’s 1987 formation.
The automaker has sought to reduce the impact of strikes in South Korea by expanding production in the U.S., China, India and Turkey during the last decade.
Kia Motors Corp., an affiliate of Hyundai, is still negotiating this year’s wage pact with its union.