Wednesday, Aug. 24, 2005 | 10 a.m.
Workers at Hyundai Motor Co., South Korea's largest automaker, voted to go on strike after managers rejected their demands for higher wages and a role in deciding the company's overseas expansion plans.
Some 77 percent of 39,098 unionized workers who voted yesterday backed the strike, the union said on its Web site today. The union will hold a press briefing today at the company's factory in Ulsan to announce plans for action.
The vote highlights the opposition to Hyundai Motor's overseas growth strategy since the company this year opened its first U.S. factory to produce Sonata sedans for the world's biggest auto market. A 10-day walkout last year cost Hyundai Motor an estimated 263 billion won ($256 million) in lost sales. Under Korean law, union leaders will hold further talks with Hyundai before deciding on whether to take action.
A strike would be the second at a major South Korean company this year after unionized pilots at Asiana Airlines Inc., Korea's second-biggest carrier, stopped work for 25 days. The government on Aug. 10 invoked emergency powers to order the pilots to return to work to end the stoppage, which delayed about $150 million of exports and caused an estimated 165 billion won in lost sales.
Shares of Hyundai Motor fell as much as 3 percent and traded 2.8 percent lower at 10:54 a.m. in Seoul.
Overseas Growth
Hyundai opened its first U.S. plant in Montgomery, Alabama in May. The carmaker plans to make about 120,000 Sonatas in 2005 and expand annual production to 300,000 vehicles. The automaker is building a second factory in the Chinese capital next to Beijing Hyundai Motor Co., which produces 300,000 cars a year.
Hyundai Motor on July 28 reported second-quarter profit rose 24 percent after it recouped provisions for warranties on its vehicles and sold more Sonatas in the U.S., China and India.
Unions also want to extend the retirement age to 60 years from the current 58 and be paid an annual bonus equivalent to eight months' salary compared with seven months. Workers also want better health care.
This would be the first strike by Hyundai workers since April 1, when they took part in a partial stoppage to show support for the Korean Confederation of Trade Unions, the country's second-largest labor group.
Hyundai Motor agreed to the labor union's demands last year after workers held 10-day partial strikes beginning June 25. Workers returned to work after the company offered to raise monthly salaries, with other benefits.
--Editor: Espina, Foxwell, Okeson
To contact the reporter for this story: Heejin Koo in Seoul at (822) 3702-1609 or hjkoobloomberg.net
To contact the editor responsible for this story: Bruce Grant in Hong Kong at (852) 2977-6452 or brucegbloomberg.net; Eugene Tang in Tokyo on (81) (3) 3201-2373 or eugenetangbloomberg.net
-0- Aug/24/2005 2:19 GMT
archive
