Hyundai Motor (005380.KS) CEO Choi Young-il expressed strong concern over the union's decision to stage additional strikes, saying, "We must coolly judge what will truly remain at the end of a strike." He appealed that amid a challenging business environment marked by declining earnings and large-scale future investment, both labor and management are being driven toward mutual destruction by unacceptable union demands, including the reinstatement of dismissed workers.
Choi issued a statement containing these remarks to employees on the 16th. Hyundai Motor's labor and management had begun wage negotiations in early May, earlier than in previous years, in order to reasonably conclude the distribution of performance-based compensation based on last year's business results. A consensus had also formed to focus on core operations in time for the display of new and derivative vehicles in the second half.
But now, more than two months later, the negotiations are heading toward a breakdown. "The union is pushing ahead with strikes on the grounds that it cannot conclude negotiations without the reinstatement of dismissed workers, which is not a subject of negotiation, and without the retirement age extension and bonus increases that are matters for the collective agreement," Choi said. "I cannot help but feel regret that the union is insisting on these demands despite the clear position of impossibility we have stated for years."
The union's strike is expected to face even greater criticism, particularly given that Hyundai Motor's business situation has been steadily worsening. Last year, Hyundai Motor's operating profit fell 19.5% from the previous year, followed by a sharp 30.8% plunge in the first quarter of this year. In the second quarter as well, the impact of the sales slump continues.
Nevertheless, the company is carrying out astronomical investments for its future survival and employment stability. In addition to the LT2 line installation project at the Jeonju plant (1.2 trillion won), a new electric vehicle (EV) plant (2.3 trillion won), and the construction of a hydrogen fuel cell plant (0.9 trillion won), the company decided this year to also rebuild its existing Plant 1 and Line 42. "We presented the best possible proposal by comprehensively considering last year's results, this year's business environment, and future investment resources, and we also reached agreement on 12 separate demands including allowances," Choi said, emphasizing that the company had done its utmost to conclude the negotiations.
The damage caused by the prolonged union strike is snowballing. Beyond the accumulating production disruptions and workers' wage losses, parts suppliers are also being directly hit by production halts and delivery disruptions. On top of this, the labor-management conflict is adversely affecting the stock price, heightening shareholders' anxiety and external criticism.
"Amid the enormous damage and growing internal and external concerns, I ask you to coolly judge whether it is truly right for irreversible losses and damage to keep accumulating," Choi said, once again urging wise judgment. "The path we must take is not the mutual destruction of a strike, but a path where Hyundai Motor, its employees, parts suppliers, and shareholders all coexist and grow together."
