Hyundai Motor wage talks end in tentative deal as attention turns to Kia

Hyundai Motor and its labor union have reached a tentative wage agreement after months of disputes over pay and robotics, with attention now shifting to wage talks at Kia.

The two sides reached the tentative agreement during their 17th round of negotiations, Hyundai Motor said Tuesday. The negotiations began Monday and continued into Tuesday.

The deal includes a 100,000 won ($72) increase in monthly base pay, partly reflecting regular pay increases based on seniority; a performance bonus equivalent to 400 percent of monthly base pay plus 12.7 million won; 15 shares of company stock; and 500,000 won in welfare points. Vacation allowances will also increase by 200,000 won starting in 2027.

The union estimates that the package would increase compensation for each member by 40.84 million won this year.

The agreement will be finalized if it wins approval in a vote of all union members on Monday.

The union had sought a performance bonus equivalent to 30 percent of the company's net profit last year. But the bonus is estimated at around 15 percent of operating profit under the tentative agreement, according to the union.

The two sides agreed to revisit an increase in regular bonuses — another major issue in this year's negotiations — during next year's collective bargaining.

They also agreed that if legislation extending the retirement age is enacted, the company will implement the extension without expanding its wage peak system. The system is to reduce the employees’ pay as they approach retirement, in exchange for continued employment.

The company, however, did not accept the union's demand to reinstate members who had previously been dismissed over illegal activities.

The two sides agreed to hold longer-term discussions on a proposal to increase the fixed portion of production workers' monthly pay regardless of the number of hours they work.

Hyundai Motor also agreed to hire 500 new production workers, with 200 to be recruited in the second half of next year and another 300 in 2028.

The company also agreed to drop 10 compensation claims and provisional attachment cases against the union, totaling 21.17 billion won. The cases involved demands for compensation over illegal activities as well as legal steps to temporarily freeze union assets.

Disputes over bonuses and robots

This year’s negotiations had been difficult from the outset, as record performance bonuses at semiconductor companies such as Samsung Electronics and SK hynix raised expectations for wage deals across other industries.

Tensions were further heightened after Hyundai Motor Group announced earlier this year plans to deploy Atlas — a humanoid robot developed by its U.S.-based robotics subsidiary Boston Dynamics — on production lines.

The union strongly opposed the plan, saying it would “reject the deployment of robots on production lines without an agreement with workers.”

During negotiations, however, both the company and the union agreed on the need to introduce technologies such as physical AI and robotics to secure future competitiveness.

The two sides agreed to transparently share progress on new businesses and technologies and jointly respond to changes arising from the transition to future industries.

The negotiations also resulted in significant production disruptions. The union staged a total of 60 hours of strikes, including its first full-day strike in a decade. Since Hyundai Motor operates separate day and evening shifts, the strikes resulted in a combined 120 hours of production-line shutdowns across the two shifts.

The auto industry estimates that the disruptions prevented the production of around 55,200 vehicles and resulted in more than 2.3 trillion won in lost sales.

Attention turns to Kia

With Hyundai Motor reaching a tentative agreement, attention is now turning to wage negotiations at Kia, another Hyundai Motor Group company.

Kia's union has announced plans for partial strikes lasting two to four hours by shift from Wednesday through Friday. The two sides said the strikes could be called off depending on progress in negotiations Tuesday.

The union is demanding a 149,600 won increase in monthly base pay; a performance bonus equivalent to 30 percent of last year's operating profit; the introduction of a four-and-a-half-day workweek; and an extension of the retirement age.

"We apologize for causing concern to our stakeholders such as shareholders, customers and suppliers, due to the prolonged difficulties in negotiations and the strikes," a Hyundai Motor official said.

BY KO SUK-HYUN [[email protected]]