Hyundai, Kia labor unions vote to strike

SEOUL, South Korea—Labor unions at Hyundai Motor and its affiliate Kia Motors said workers voted to strike after talks with management for increased pay and benefits collapsed.

Hyundai union spokesman Kwon Oh-il said Wednesday that management refused all demands by the union during three months of annual talks.

The union wants workers to get improved benefits, including 10 million won ($8,900) support to help children of unionized workers seek jobs instead of entering college, a 130,000 won ($116) increase in monthly base income, bigger bonuses and full reimbursement of medical expenses if workers are diagnosed with cancer.

Kwon said 46,000 Hyundai workers will determine the extent of the strike early next week. Kia’s 30,000 workers are taking a similar step.

Hyundai said it had offered to resume talks with the union on Friday.

“We regret that the union has begun preparations to strike despite the company’s proposal to outline its offers in the next round of talks. There are also many aspects of the union’s demands that are hard to accept from the company’s point of view,” Hyundai said in a statement.

Kwon said Hyundai’s proposal was insincere and short of a full response to the union’s demands.

Hyundai and Kia, which together form the world’s fifth largest automaker, have been plagued by disputes with their unions for the past two years.

Hyundai’s latest earnings were hit by its union’s refusal to allow overtime for three weeks earlier this year and by the rising popularity of foreign cars in South Korea. European and U.S. carmakers lowered prices after free trade deals took effect. The maker of the Elantra said the industrial action resulted in lost output of 83,000 vehicles worth 1.7 trillion won ($1.5 billion).

The company estimated it lost production of 82,000 vehicles worth 1.7 trillion won due to 92 hours of walkouts by workers in 2012.

With labor strife at home and waning demand from Korean consumers, South Korea’s largest automaker has increasingly looked abroad to ramp up production. Hyundai is considering increased production in China, its chief financial officer said last month.