Hyundai workers shelves planned industrial action as downturn threatens auto industry

Kenneth Afor with agency report

Union workers at Hyundai Motor in South Korea on Monday, have voted to shelve the planned industrial action in the company.

The workers had earlier planned to down tool production following the company’s decision to offer the lowest bonus to its workers in nearly two decades.

According to news wire reports, the low bonus is as a result of a downturn in the auto industry and the brewing trade dispute between South Korea and Japan.

However, the Union leader has assured that they will return to work after putting into consideration the lingering economic crisis both in the industry and the two countries’ trade logjam.

“Considering a U.S-China trade war, a Korea-Japan economic war and the auto industry downturn,” said, union leader.

More than half of the workers (62 percent) voted to shelve the strike on approval of the bonus which is equivalent to one and a half month’s salary plus 3 million won – the lowest bonus payment since 2000, said union officials.

The shelved strike will prevent Hyundai production losses in South Korea, a time when the company is expected to recover from six straight years of profit decline.

The auto maker is expected to post profits in the coming years due to favourable currency exchange and the production of new sport-utility vehicles (SUVs).

South Korea accounts for 37 percent domestic production of Hyundai’s total global output in 2018 but that has reduced to give room for overseas production.

Meanwhile, other auto makers in South Korea including General Motors (GM) are planning for an uneasy annual wage cut. It wants a wage cut for its members if successful, would be for two straight years but, that has been opposed by the South Korean union workers and they are threatening for a full industrial action this month.

Also, Renualt Samsung, a division of French automaker, Renualt SA, is planning to cut production of its Nissan’s Rogue SUV by October which will stop shipments of the car model to the United States.