South Korea’s Hyundai, union agree on tentative wage deal after rare full-day strike

South Korean car manufacturer Hyundai Motor and its workers' union have reached a tentative wage agreement after a rare full-day strike on Friday. The strike involved around 40,000 employees out of a workforce of 73,000 at the country's largest carmaker, marking the first such action for a decade. Following the strike, union officials said they had re-engaged in talks with Hyundai and resumed negotiations, putting off shorter strikes planned for the week.

Hyundai announced on Tuesday that both parties had agreed to a "tentative agreement," while the union indicated the firm had partially met their demands. The union stated that Hyundai would increase the basic monthly salary by 100,000 won (approximately US$72) and provide a bonus equivalent to four months' salary. The company also agreed to raise the retirement age once a nationwide hike from 60 years to 65 is approved by legislation.

Hyundai will refrain from applying the wage peak system, which reduces salaries of older workers in their final years, after the retirement age increase, according to the union.

Union members will vote on the proposals on August 31. In response to the agreement, a Hyundai spokesman acknowledged the employees' commitment and appreciated the efforts of the negotiating teams. Both parties recognized the importance of advanced technologies, such as "physical AI and robotics," in the future of mobility.

This year, Hyundai workers have staged a total of 60 hours of strikes, causing estimated losses of around US$1.6 billion, as calculated by local news agency Newsis. In contrast, SK Hynix, another South Korean company facing employee dissent, saw its union members narrowly reject a tentative wage agreement on Tuesday. Out of 15,045 workers who voted, 50.08% voted against the agreement, with the difference being just 25 votes.

The agreement, reached last week, included a 6.3% wage increase and a revision to SK Hynix's profit-sharing bonus scheme, where 40% of bonuses would be paid in cash and 60% in company shares. However, this year, management's proposal to pay more than half of bonuses in shares met with opposition from some workers who were concerned about the volatility of SK Hynix's shares.