The Hyundai Motor Branch of the Korea Metal Workers Union reaches a tentative wage agreement with management late Wednesday, ending a threat to resume partial strikes.
While only wage matters have been released, the new tentative deal seems only mildly different from the first agreement struck Aug. 24 and was rejected by a staggering 78% of the workers who cast ratification votes.
The new agreement calls for a monthly wage increase of 72,000 won ($64), only 14,000 won ($12.50) more than the monthly increase in the rejected pact.
The new deal calls for the same bonuses as the August agreement, with no change in the special bonus equal to 3.5 months’ pay or in the 3.3 million won ($3,000) incentive bonus. It also calls for all workers to receive 10 shares of common stock, a provision unchanged from the August deal.
Workers turned down the August pact claiming it was less generous than the agreement inked in 2015. Whether they will approve the new tentative pact in voting Thursday remained to be seen, as the agreement still is less generous than the 2015 contract.
In 2015, the workers received a monthly wage increase of 85,000 won ($75.50), some 13,000 won ($11.50) higher than the latest offer. They also got a signing bonus equal to four months’ pay and an incentive package of 4.2 million won ($3,700).
Both the union and Hyundai management were under pressure to sign an agreement. Talks resumed Wednesday but the union declared that unless a deal was reached that day it would again launch partial strikes that have had a severe impact on Hyundai production. Government officials contend the strikes have dragged down Korea’s exports and impeded its economic recovery.
Korea’s labor minister had threatened to issue a back-to-work order if talks broke off again.
Hyundai issued a statement following the deal saying common ground was reached that should prevent further “catastrophic strike action.”
The automaker says the strikes caused “substantial impact, not only to the company, but to regional and national economies.”
According to a government report, the 24 days of partial strikes and one full-day strike cut production by at least 142,000 vehicles since mid-July. The vehicles were valued at 3.1 billion won ($2.8 million).
Hyundai also lost production last week when Typhoon Chaba slammed Korea’s southeast coast, hammering Ulsan, where Hyundai’s largest vehicle-production center is located. Flood damage temporarily closed one vehicle-assembly plant for the day and completely closed another one until Monday.