The Korean auto industry is still reeling from unsettled labor disputes that are likely to extend into next year amid sluggish sales as well as the fallout from a diplomatic row with China this year.

Hyundai Motor, the nation’s largest carmaker, and GM Korea, the Korean branch of the US carmaker, are unlikely to reach agreements with their respective labor unions over wages this year, according to industry watchers Monday.
 
If they fail to narrow differences in the remaining two weeks of the year, the two companies’ labor negotiations will continue into next year.

The persisting labor disputes raise uncertainty in the carmakers’ businesses, as the unions threaten sit-in protests.

Unionized workers at Hyundai Motor suspended operation of the carmaker’s plant in Ulsan for 24 hours last month, with partial strikes also carried out this month. Labor and management have locked horns over the range of wage increases.

Hyundai’s labor group wants basic salaries increased by 154,883 won ($142) per month and 30 percent of the company’s net profit in incentives. The company saw 5.71 trillion won in net sales last year. The management has refused to accept labor’s demands, offering a monthly pay raise of 42,879 won and 250 percent of their basic monthly salary plus 1.4 million won in incentives.

Amid rumors of a business withdrawal, GM Korea is also saddled with labor issues.

The carmaker’s new CEO Kaher Kazem met union members on Nov. 30 to resume wage negotiations, but the meeting ended after just 30 minutes, according to the company.

The management asked for labor’s understanding on the worsening financial viability of the US carmaker’s operations in South Korea. But labor demanded the management present the carmaker’s future plans here. The two sides are likely to resume talks this week, but are unlikely to reach an agreement this year, a company official said.

Partly agreeing to the labor arbitration panel’s recommendation, the management suggested a raise of 50,000 won in basic monthly salaries and an incentive of 10.5 million won.

Meanwhile, labor is demanding management operate a two-shift work system, which would mean two groups working eight hours a day, as well as guarantee their jobs amid intensifying rumors of GM Korea’s withdrawal. The management and labor at Kumho Tire, the nation’s second-largest tire maker, are also in conflict over wages and restructuring plans aimed at normalizing operations.

Creditors of the debt-ridden tire maker failed to sell the company to Chinese tire maker Double Star three months ago. The company is likely to go into court receivership, according to reports.

By Cho Chung-un (christory@heraldcorp.com)