Hyundai workers go on strike in South Korea image

In their usual annually pattern, Hyundai workers will go on strike, as the negotiation on their wages did not conclude within their expectations.

Hyundai Motors have been struggling for some time to keep its sales and profits on a solid growth path, as the second quarter of this year is likely to bring its tenth consecutive drop in quarterly earnings. Even if June brought a 9 percent rise in global demand, the South Korean automaker dropped 1 percent in deliveries through June because of output issues caused by weaknesses in China, Brazil and Russia. And a prolonged strike would definitely hurt even further their outlook for 2016. A strike is an annual event for Hyundai, which was hit by such actions in all but four of the workers union’s 29-year history.

This year, the union has asked for a 7.2 percent rise in the basic monthly wage and performance pay totaling 30 percent of the automaker’s 2015 net profit, but the company plans to freeze salaries and to reconsider the whole payment structure. Therefore, 77 percent of Hyundai’s 48,806 unionized workers in South Korea decided to halt production for four days next week. Similar negotiations are underway at Hyundai’s partner, Kia Motors, and if the union fails to reach a deal it plans to hold a strike vote next month, according to a union official. Hyundai’s cumulative global sales for 2015 stayed flat over a year earlier, with a total of 4,964,837 units delivered, aiming to overpass 5.0 million vehicles globally in 2016.

Via Reuters