Hyundai Motor Group said Wednesday it has signed a tentative wage agreement with the company’s labor union, extending their strike-free negotiation streak to five consecutive years.

The management and labor union members including Lee Dong-suk, president of the domestic production department at Hyundai Motor Group, and the company’s union representative Ahn Hyun-ho carried out the 21st round of negotiations at the Ulsan plant on Tuesday.

The key agendas on the table were the wage hike and extending the retirement age. The two agreed on a 4.8 percent increase in base pay worth around 111,000 won ($83) and a bonus equal to 300 percent of the monthly salary and an extra 8 million won. The growth rate of the overall salary is expected to be 12 percent compared to last year, according to Hyundai.

This year, the employees will receive an extra 2.5 million won in celebration of the carmaker’s flagship electric vehicle Ioniq 6 being named as the World’s Car of the Year in April. A bonus equal to a month's salary will be given to encourage workers to ensure Hyundai cars meet their production, quality and safety standards for 2023. The workers will also be receive 15 shares of the company and 250,000 won in market vouchers.

Previously, the union had insisted on a 184,900 won hike in base pay and demanded Hyundai pay 30 percent of its operating profit made last year. The carmaker, on the other hand, had pushed for a 106,000 won increase and bonuses worth 350 percent of monthly salary and an extra 8.5 million won.

The two, however, did not reach a settlement on the retirement age. The union had demanded extending the retirement age from the current 60 years old to 64 years old, while Hyundai had argued it can rehire the retirees for a maximum two years.

“The negotiations on the retirement age issue is expected to drag on until the end of this year,” a source close to the matter said on condition of anonymity.

In the wage bargaining process, the company and the labor union signed a special agreement that underscores transforming manufacturing plants in Korea into a key production base for future mobility.

Hyundai said it plans to adopt “hypercasting” technology in a move to improve the manufacturing process and make lighter car bodies. The cutting-edge die-casting method can produce bigger aluminum car parts than the existing manufacturing process that makes aluminum parts separately. Tesla has already adopted the same technology called Giga Press.

The world’s third-largest carmaker will apply the hypercasting technology from 2026 after setting up the manufacturing plant.

Hyundai will also build a multipurpose plant to produce a small quantity of its luxury models or limited edition lineups.

As for recruitment, the carmaker agreed to hire 500 tech talents in 2024 and 300 in 2025, in addition to its agreement last year to recruit 300 employees in 2024. It will also devise the recruitment and selection criteria for the employees who will be working at its new EV manufacturing plant in Ulsan that is scheduled to start pilot operation from 2025.

Addressing the country’s low fertility rate, the company and the union signed another separate agreement on promoting childbirth. It will give five days of paid fertility leave from the current three days as well as 1 million won per infertility treatment. Depending on the number of children employees have, incentives from 3 million to 5 million won and vouchers worth 500,000-1.5 million won will be given.

Taking effect from next year, the tentative deal is subject to a vote by union members on Sept. 18. The union said it has postponed its partial strike that was planned from Wednesday.

Experts say Hyundai’s wage bargaining with the labor union, if settled, is expected to pave the way for the ongoing labor negotiations of other automakers here.

“One thing positive about the largest carmaker’s wage settlement is it might accelerate the negotiations between the management and labor unions of General Motors Korea and Renault Korea Motor Co.,” said Kim Pil-su, a car engineering professor at Daelim University.

But Kim stressed that the Hyundai labor union’s demand on extending retirement age is not that simple because it entails changing the entire pension system of other companies.