Labor Dispute at Hyundai’s South Korean Plants Affects Production image

Hyundai announced that the labor dispute at its South Korean plants have caused a production loss of $730 million.

Hyundai manufactures almost half of its vehicles in South Korea and these labor disputes are a reminder of the volatile labor relations in the region, a significant drawback for Hyundai’s investors. Over the past one month and a half 45,000 labor union members refused to work on weekend shifts amid a dispute over pay

In 2012 Hyundai shortened shifts during weekends due to the union pressure and cut salaries accordingly. The union requests payment for weekend shifts to be increased to reflect the improved productivity since 2012 and the antisocial working hours.

“It has caused substantial disruption to our domestic production. We are now in talks to resolve the issue,” said a company spokesman.

He added that the labor disputes have already slashed production by 41,000 vehicles and might have caused an impact on sales of Won1tn or even more if disputes continue this entire month. Although half of Hyundai’s output comes form South Korea, the company said that plants here are less productive compared with those in the US for example.

Analysts believe that these strikes, unusual in South Korea, are caused by the election of Mr. Moon Yong-moon as the union’s leader. Two years ago, when he was elected, Mr. Moon promised to win higher salaries, longer careers and shorter working hours for his colleagues.