The Hyundai Group, which also includes affiliates Kia Motors Corp and Hyundai Mobis, last week announced it won a bid for a prized Seoul lot that would house the company’s new headquarters.
Announcing it secured the plot for $10 billion, the bid’s amount – reportedly much higher than rival bidder’s Samsung Electronics – triggered investor dissent, especially after reports emerged that Hyundai’s own board of directors was not briefed on the final amount.
“Before the land bid, I expected Hyundai to reach a wage deal this week. But the land bid complicates wage talks,” said Park Tae-ju, a professor at the Employment & Labor Training Institute. “I expect the talks to drag on longer than expected,” Park added.
“Chairman Chung Mong-koo should not be betting the future on land, but investing in people,” said Hyundai’s union. Kia’s labor representatives echoed, saying employees “are angered by the astronomical amount of money” spent on the land in the high-end Gangnam district of Seoul.
Next up, the bid also angered workers at Hyundai and Kia, who decided yesterday to enter a partial strike through September 26. The huge amount – which is seen three times bigger than the land was evaluated for – could seriously complicate the annual wage talks. The already perennially contentious negotiations could be further disrupted now by the employee resentment, while analysts and investors are more concerned with a recovery in Hyundai’s “chaebol” – as they call the rather “paternal” management once promoted by Chairman Chung Mong-koo.