Hyundai Motor union stages first full nationwide strike in 12 years
SEOUL (Reuters) – Hyundai Motor’s South Korean labor 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, sporadic stoppages since July at the automaker’s factories across South Korea, its biggest manufacturing base which produces nearly 40% 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 ($2.02 billion) as of Friday, the biggest output loss for the automaker in terms of the value of the 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.
Workers have not put a timeline on the strike, saying it depends on the outcome of wage negotiations.
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.
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% to about 7.96 million vehicles this year, below their targets of 8.13 million vehicles..
Shares of Hyundai Motor were down 1.8% at 139,500 won ($126.43) as of 0111 GMT, about half of the record-high level posted in May 2012.
($1 = 1,103.4000 won)