Hyundai Workers Agree to Lower Bonus, No Strike

Hyundai Motor Co.’s union workers in South Korea have accepted the smallest contract bonuses in nearly 20 years and agreed not to strike for the first time since 2011.

Reuters says 56% of Hyundai workers approved a package that will pay them an average bonus equal to six weeks of pay, plus 3 million won ($2,500). Union members also will collect a one-time payment of as much as 6 million won ($4,900) to settle a dispute with the company over previous compensation calculations.

Auto workers in Korea negotiate new labor contracts on an annual basis. They have staged walkouts in all but four years since they became unionized 32 yeas ago, Reuters notes.

But this year the union drew widespread criticism for threatening to strike in spite of their relatively high average wage of 92 million won ($75,700). Hyundai, which has posted six consecutive years of declining profits, is expected to rebound in 2019.

The company’s net profit in the first half of the year jumped 27% to 2 trillion won ($1.7 billion) as revenue grew 8% in spite of lower unit sales.

This year’s agreement comes as Korean carmakers face declining demand for their exported models. Sales also are being hurt by the U.S.-China trade war and a simmering economic battle between Korea and Japan.