Hyundai en route to end union strike image

The company reached a preliminary agreement with its South Korean union to raise wages, on its way towards the end of a strike that resulted in an estimated 1 trillion won ($910 million) in lost output.

Workers have been staging partial walkouts since Aug. 20, causing an estimated 50, 000 vehicles in lost production. South Korea’s largest automaker, which has seen profit fall for three straight quarters, is grappling with increased competition as a weaker yen gives Japanese carmakers an edge in the U.S.

Under the recent agreement, which still needs to pass a vote by the Korean carmaker’s 46,000 union members on Sept. 9, the company will raise the average base salary by 5.1%, Seoul-based Hyundai Motor said in a statement yesterday. The automaker also agreed to pay a one-time bonus equivalent to 3 1/2 months of wages plus 5 million won, it said.

The union, which demanded higher compensation for weekend shifts, refused extra work for 13 weekends beginning March 9 – causing an estimated loss of 1.7 trillion won, according to the company’s estimates. Hyundai estimates that labor disputes have caused missed production of more than 1.2 million vehicles and lost sales worth 13.3 trillion won before this year. Workers have gone on strike in 23 of 27 years since the union’s 1987 formation.

Via Bloomberg