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Hyundai Motor union stages first full strike in 12 years
[SEOUL] Hyundai Motor's South Korean labour union staged its first full nationwide strike in 12 years on Monday over wages, putting the automaker's earnings and sales targets at risk.
The full-day walkout came after a series of partial stoppages since July at the automaker's factories across South Korea, its biggest manufacturing base which produces nearly 40 per cent of its vehicles sold globally last year.
Sporadic strikes since July had led to lost production of 101,400 vehicles worth 2.23 trillion won (S$2.7 billion) as of Friday, the biggest output loss for the automaker in terms of value of vehicles.
"This year's strike is lasting longer than expected. The third-quarter earnings should disappoint," Eim Eun-young, an auto analyst at Samsung Securities, said, also citing weak domestic demand.
Hyundai, the world's fifth-biggest automaker along with Kia Motors, said in a statement on Monday it was "obviously disappointed" with any stoppage in production and was continuing to work with the union to resolve this dispute.
The 48,000-member union plans to stage a partial strike for the remainder of this week while continuing annual wage talks, a union official said.
Hyundai Motor has been hit by strikes in all but four of the union's 29-year history, although it usually makes up for lost output by the end of each year.
The company posted its tenth consecutive quarterly profit fall in the April-to-June period, hit by an emerging market downturn and its failure to tap into strong global demand for sport utility vehicles.
Cho Soo-hong, an analyst at NH Investment & Securities, said Hyundai and Kia Motors were expected to see global sales slip 0.6 per cent to about 7.96 million vehicles this year, below their targets of 8.13 million vehicles..
Shares of Hyundai Motor were down 2 per cent at 139,000 won as of 0240 GMT, about half of the record-high level posted in May 2012.
Late last month, Hyundai Motor's unionised workers in South Korea overwhelmingly voted down a tentative wage deal which was less generous than last year's package.