The labor union of South Korea’s leading automaker Hyundai Motor Co. on Monday entered its first full-fledged strike in 12 years amid little progress in wage negotiations.
Advertisement
Experts raised concerns that the delay in production due to the labor disputes could hinder the carmaker’s efforts to restore its production volume in the remaining three months.
The workers also plan partial strikes for six-hours from Tuesday through Friday, he said.
The full-day walkout came after a series of partial, sporadic stoppages since July at the automaker’s factories across South Korea, its biggest manufacturing base which produces almost 40 percent of its vehicles sold globally a year ago.
“While we are obviously disappointed with any temporary stoppage in production, we still continue to work with our labor union to resolve this issue as quickly as possible”, the company said.
The full-scale strikes at Hyundai’s plants in Ulsan, Jeonju, and Asan, are the first since 2004.
The activity in Hyundai’s South Korean factories came to a grinding halt at 6.45 p.m. local time on Sunday after the workers rejected the latest tentative wage deal offered by the management.
Hyundai Motor has been hit by strikes in all but four of the union’s 29-year history, although it usually makes up for lost output by the end of each year.
Hyundai posted its 10th consecutive decline in quarterly profit in the second quarter, and warned of a tough second half, dimming the outlook for achieving its full-year sales target.
“This year’s strikes at Hyundai plants are longer than expected”. A total of 19 partial strikes have been staged this year, costing the company around 1,01,400 vehicles or 2.23 trillion won loss in production. “The third-quarter earnings should disappoint”, Eim Eun-young, an auto analyst at Samsung Securities, said, also citing weak domestic demand.
Advertisement
Hyundai and Kia Motors were expected to see global sales slip 0.6% to about 7.96 million vehicles this year, below their targets of 8.13 million vehicles, NH Investment & Securities analyst Cho Soo-hong said.
