Mounting labor problems for Hyundai and Kia image

According to new reports from South Korea, the partial strikes that plagued the home production for both Hyundai and Kia are just the beginning of a mounting problem.

Saturday production was halted in March at two of Kia’s three assembly plants in South Korea and at all plants of its larger affiliate Hyundai, amid union protests over a new shift structure. The weekend shifts resumed in May at Hyundai and in June at Kia, after some management concessions. However, unions at Hyundai and Kia last week voted in favor of a new strike after annual wage negotiations failed to produce an agreement and staged a warning strike at Hyundai, which may have cost the company $76 million in lost production.

An analyst at KB Investment & Securities estimated the loss of the Saturday shifts would result in lost output of up to $214 each month. Hyundai and Kia have typically managed to make up much of their lost production by using overtime, which raises their labor costs.

Labor disputes were particularly common in the 1980s and into the 1990s, with many turning violent. Both Kia and Hyundai operations in South Korea have suffered strikes almost annually over the years, with the exception of a three-year period between 2009 and 2011.