Hyundai Motor union secures strike right as talks stall

Hyundai Motor's labor union has secured the legal right to strike over this year's wage negotiations. The move follows a member ballot that passed with a high approval rate and a decision by the National Labor Relations Commission to halt mediation after determining that the two sides remain too far apart. The union plans to use the strike right as leverage in continued talks with management, but with key issues still unresolved, an actual walkout cannot be ruled out.

The National Labor Relations Commission halted mediation Thursday on a labor dispute application filed by the Hyundai Motor chapter of the Korean Metal Workers' Union, ruling that the gap between the two sides in this year's wage negotiations was too wide to bridge.

The decision formally grants the union the legal right to take industrial action. Earlier, the union declared a breakdown in negotiations on June 12 and filed for mediation with the commission on June 15. On June 23, it convened an extraordinary delegates' assembly and unanimously resolved to declare a labor dispute.

A member ballot on industrial action held Wednesday also passed with a high approval rate. Of the union's 39,668 members, 37,348 cast ballots, a turnout of 94.15 percent. The count showed 34,371 votes in favor and 2,977 against. The approval rate among voters stood at 92.03 percent, while the rate against total membership was 86.65 percent — up 1.11 percentage points from last year's voter approval rate of 90.92 percent.

The union plans to launch a strike committee as early as Tuesday and use the occasion to discuss the form, schedule and intensity of future action. Once the committee is in place, options such as partial strikes, refusal of overtime and refusal of extra shifts are expected to come onto the table.

Securing the strike right does not, however, mean a walkout is imminent. Hyundai Motor's union has frequently used the right as a bargaining chip to reach a tentative agreement without actually striking. In both 2023 and 2024, the union secured the right but did not follow through with industrial action.

Labor and management at Hyundai Motor have typically wrapped up wage negotiations around the summer vacation period or the chuseok holiday. Deals were reached on Aug. 27, 2019; Sept. 25, 2020; July 27, 2021; July 19, 2022; Sept. 18, 2023; July 13, 2024; and Sept. 16 last year.

The central issues in this year's negotiations are wage increases, job security and the response to industrial transformation. The union is demanding a base pay raise of 149,600 won ($97) per month, a performance bonus equivalent to 30 percent of annual salary, and an 800 percent increase in bonuses. Its demands also include an extension of the mandatory retirement age, expanded new hiring and the reinstatement of dismissed workers.

Management, for its part, says it cannot accept the union's demands as presented, citing global economic uncertainty, potential sales volatility and rising fixed costs. The company has also stressed the need to optimize its workforce as it navigates the shift toward electrification and AI-driven automation.

If a strike leads to actual production line stoppages, the financial impact on Hyundai Motor could be significant. Last year, labor and management staged three rounds of partial strikes — the first since 2018 — resulting in an estimated 400 billion won in lost production.

The damage was even greater during the 2017 wage and collective bargaining talks, considered one of the largest strikes in the company's history. The union staged 24 rounds of partial strikes that year, with production losses estimated at more than 76,900 vehicles worth approximately 1.62 trillion won. Negotiations dragged on for nine months before a final agreement was reached on Jan. 16 of the following year.

Hyundai Motor has already faced pressure on both production and sales in the first half of this year, with parts shortages stemming from a fire at supplier Anjeong Industrial, a Palisade recall and logistics disruptions tied to instability in the Middle East. The second half is packed with major model launches — including the new Avante, the new Tucson, a GV80 facelift hybrid and the Genesis flagship electric SUV GV90 — meaning any production disruption could weigh on plans to recover utilization rates and reverse an earnings slide.

The union's moves could also ripple across the broader Hyundai Motor Group. As the most influential union in the group, Hyundai Motor's bargaining trajectory has often shaped negotiations at affiliates including Kia and Hyundai Mobis, both of which are also in the midst of their own wage talks this year.

Subcontractor unions are also stepping up pressure. The non-regular and refractory maintenance workers' chapters at Hyundai Steel, among other subcontractor unions, have signaled rallies and a general strike, meaning the outcome of Hyundai Motor's labor talks could have broad implications for industrial relations across the group.