Tension mounted at production plants at South Korea’s two major automakers ahead of the weeklong Chuseok holiday, with unionized workers pledging to increase pressure on management over stalled wage negotiations.

Unionized workers at Hyundai Motor, the nation’s largest carmaker, are set to hold a vote to form a new executive body, with two final candidates, both known as hard-liners, running in the election on Friday.

Both candidates have remained adamant, vowing that they won’t compromise with the management, despite the time pressure that the negotiation should be ended within this year.

One candidate said he would extend retirement age so that the workers could stay until they reach 65 when they become recipients of the monthly national pension. Companies are required by law to allow workers to continue working until 60. He also promised to demand Hyundai Motor recognize their bonuses and lunch allowances as ordinary pay, referring to a recent court ruling that ordered Kia Motors, Hyundai’s sister company, to pay 422 billion won. 

Leaders of powerful Hyundai union have been taking a hard-line stance for years, despite mounting criticism that they are holding back the industry by relying on vested interests and demands.

The continuing labor dispute is expected to impose even greater risk to the carmaker this year, with its overseas sales declining, particularly in China over a diplomatic row between Seoul and Beijing.

In the first half, Hyundai’s sales in China halved amid speculations that Beijing is taking retaliatory action against South Korean businesses over Seoul’s decision to deploy an anti-US missile system.

Hyundai also fears a possible delay in production if the labor takes sit-in protests at a crucial time of new releases.

The carmaker sold more than 3,000 units of its latest luxury sedan Genesis G70, just a week after its market debut. It worries if the ongoing dispute would suspend production of the compact sedan as well as Kona, the company’s first compact SUV released in June, would suffer a delay, causing customer inconvenience. The company also plans to release its first high-end compact sedan next year in US.

Meanwhile, no noticeable progress is being made between the labor and the management at GM Korea, despite the US carmaker’s attempt to seek a change under the new local chief.

The new CEO of GM Korea Kaher Kazem sought a rendezvous with the labor union to resume wage talks but were canceled at the last minute due to procedural problems on Sept. 15.

GM labor has demanded the management to suggest a new vision in its deteriorating business here, blaming the management for inflicting losses.

“We will stage protests regardless of a certain timeline including Chuseok,” said GM labor. “The management should suggest a vision (for sustainable business) at a time when the company has begun restructuring and resolve crisis caused by themselves.”

GM Korea posted a 634.1 billion won deficit last year, totaling an accumulated loss of 1.9 trillion won over the past three years.

The new CEO, Kazem, has urged employees to change to maintain competitiveness for a sustainable future, hinting at a large-scale restructuring. 

By Cho Chung-un (christory@heraldcorp.com)