Hyundai Motor Drops With Kia on Stalled Wage Talks: Seoul MoverRose Kim
Hyundai Motor Co., South Korea’s biggest carmaker, and affiliate Kia Motors Corp. fell in Seoul trading after labor union negotiators walked out of wage talks and threatened to ask workers to vote on a strike.
Hyundai dropped 3.2 percent, the most since July 12, to close at 225,000 won in Seoul. Kia slid 3.7 percent, while the benchmark Kospi index declined 1.5 percent.
The union walked out because Hyundai Motor didn’t show sincerity even after 18 rounds of discussions, Kim Gi Hyuk, a union spokesman, said yesterday. The union is considering voting Aug. 13 on whether to go on strike. Kia’s union will vote the same day to approve a strike, according to a statement on the labor organization’s website.
“The shares are falling as the likelihood of the union going on strike increases,” Lee Sang Hyun, an analyst at NH Investment & Securities Co., said by phone today. “The strikes will have an adverse impact on third-quarter profit.”
Hyundai and Kia’s union have said they are demanding a pay increase of 130,498 won ($117) a month and 30 percent of net income to be distributed to workers. The talks started May 28 for Hyundai Motor and July 2 for Kia.
Stalled wage talks at Hyundai last year led to the costliest strike in its history, causing a production shortfall of more than 1 million vehicles and 11.6 trillion won in lost sales.