Hyundai Motor Workers Set to Elect Moderate as New Union Leader

Hyundai Strike
An employee enters an office at the Hyundai Motor Co. plant during a strike by the company's labor union in Ulsan, South Korea on Aug. 20, 2013. Photographer: SeongJoon Cho/Bloomberg

Hyundai Motor Co. workers will choose today between two moderate candidates seeking to replace the incumbent leader of their union, who led strikes that caused record production losses at South Korea’s largest carmaker.

Vying for the most votes from the 47,000-member union are its former head Lee Kyung Hoon, 52, and Ha Bu Young, 53.

The winner will replace Moon Yong Moon, whose leadership over the past two years came to be considered a sign of resurgent militancy at Korean labor unions amid a shift of production overseas. Hyundai, which has suffered strikes in 22 of the past 26 years, lost output of more than 215,000 vehicles equivalent to 4.4 trillion won ($4.2 billion) of sales due to stoppages during Moon’s term.

“Both candidates hold moderate views and are less militant than the current union leadership,” said Shin Chung Kwan, an analyst at KB Investment & Securities Co. “Whoever prevails, it will be a win-win for the company.”

Hyundai had its longest stretch of uninterrupted production during Lee’s previous term as the union’s leader, from 2009 to 2011. Ha has campaigned on promises to focus on reforming the union itself.

The Seoul-based carmaker has lost production of more than 1.3 million vehicles valued at 16 trillion won due to strikes since the union’s formation in 1987, according to company estimates. Past worker protests have led to clashes between police and unionists armed with steel pipes and Molotov cocktails.

Nationwide, the number of work days lost due to labor disputes more than doubled last year from two years earlier, according to data from the Ministry of Employment and Labor.

Working Hours

Lee, who joined Hyundai in 1986, has promised to cut working hours to 40 a week for all employees by reducing afternoon shifts by an hour, increase base salaries and bonuses, eliminate conditions for employees to keep working until the age of 60, and to have the company distribute 60 shares to each worker, according to his campaign website.

Ha joined Hyundai in 1977 and helped form the union in 1987. He has vowed to reform the union by stripping its leadership of perks, increasing debates, setting up a team to enhance the union’s public image through better relations with the media, and open up its books every quarter to improve transparency, according to his website.

Ha has also promised to increase base salaries and bonuses and set the retirement age at 60 without conditions.

Profit Rises

Hyundai’s profit for the three months ended Sept. 30 increased for the first time in four quarters, climbing 5.6 percent from a year earlier to 2.14 trillion won. Rising sales in emerging markets including China, where deliveries jumped 15 percent, helped cushion the fallout from a three-week strike at Hyundai’s South Korean plants that began Aug. 20.

Hyundai’s South Korean workers approved a wage agreement on Sept. 9 that raised annual pay by 28.8 million won per worker, including an average increase in base salaries of 5.1 percent, according to the union. The pact will expire after one year.

The automaker faces mounting challenges overseas as a strong won, which has gained about 26 percent against the yen in the past year, hurts its competitiveness against Japanese rivals in markets including the U.S.

Hyundai rose 1.6 percent to 254,000 won in Seoul yesterday, compared with a decline of 0.5 percent for South Korea’s benchmark Kospi index. The shares have climbed 16 percent this year.

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