Hyundai Motor Co. Ltd.’s unionized workers ratify a revised wage package late Thursday night, followed within hours by a tentative agreement for similar terms by workers at Kia Motors Corp.
Ratification of the Hyundai agreement ends 11 weeks of partial strikes and protracted negotiations with the Hyundai Chapter of the Korea Metal Workers Union.
The Hyundai deal calls for a 5.6% monthly wage increase of 85,000 won ($73), a 4 million won ($3,428) one-time incentive bonus and 3-months’ pay as a performance bonus. An earlier tentative agreement offering a 3 million won ($2,571) incentive bonus had been rejected.
The tentative Kia agreement matches Hyundai’s terms, except the incentive bonus is less at 3.6 million won ($3,085). A date for next week’s ratification vote has not been announced.
Both the Hyundai ratified contract and the Kia tentative agreement provide for replacement of the current two 10-hour shifts with an 8-hour day and 9-hour afternoon shift.
This is a basic central demand of the KMWU, which has sought to establish like pay scales and working conditions at all of Korea’s unionized auto makers, including GM Daewoo Auto & Technology Co.
Hyundai will phase in the shift change using its Chongju commercial vehicle plant on a pilot-program basis starting in January. The shift change will not go into effect at the Ulsan and Asan plants until next September.
In related news, Hyundai Motor’s Vice Chairman and co-CEO Kim Dong-jin has submitted a letter of resignation to become vice chairman of Hyundai Mobis Corp., the automotive parts and systems supplier arm of the Hyundai-Kia Automotive Group.
“The move has been made to strengthen the group’s parts business as we expand here and abroad,” a spokesman tells Ward’s. “We have announced no plans for a successor at Hyundai Motor.”
The move comes as Hyundai Group Chairman Chung Mong-koo leaves Korea to participate in a summit meeting in Russia between South Korean President Lee Myung-bak, Russian president Dimitry Medvedev and Prime Minister Vladimir Putin.
Chung also will visit local officials and inspect operations at Hyundai and Kia plants in Czech Republic and Slovakia.