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Hyundai Motor Labor Union Demands Separation of Ownership and Management

Hyundai Motor Labor Union Demands Separation of Ownership and Management

Posted May. 12, 2005 23:26,   


At the beginning of this year’s group negotiations, the Hyundai Motor labor union issued demands that were difficult for the company to swallow, such as “the separation of ownership and management,” and as a result difficulties are anticipated in the negotiation process.

Labor-management dispute experts speculate that due to deteriorating public opinion on labor unions on account of the Kia Motors and Hyundai Motor labor union employment corruption scandal, the labor union is taking up a new card to heighten bargaining power.

The labor union for Hyundai Motors announced this year’s group negotiation demands in the “Labor News” published on May 12. The labor union asked for “the separation of ownership and management and the establishment of the professional manager system” to be inserted in the beginning of the text of the group negotiation agreement. They also asserted that such items as the “prohibition of establishment of new foreign factories without careful deliberation and resolution between labor and management” should be added.

In addition, they requested the introduction of “day shifts with two consecutive teams,” which would eliminate late-night labor after midnight and have two shifts working eight hours each only in the daytime. Currently, Hyundai Motor factories operate under a two-shift system, with the first shift showing up for work at 8:00 a.m., the second shift arriving at 9:00 p.m., and each shift lasting for 10 hours.

Among the requests of the labor union, the issue that has triggered the most sensitive reactions from the company is the demand that emphasizes “the separation of ownership and management.” This is due to the interpretation that the demand was directed at Chung Mong-koo, chairman of the Hyundai Kia Automotive Group, and his eldest son Chung Eui-sun, president of Kia Motors.

An official of Hyundai Motor said, “The separation of ownership and management is a request that has never before been raised at group negotiations,” adding that “the labor union is making an issue of the corporate succession to increase bargaining power.”

The company has also expressed resistance to the introduction of the new day shift system without reduction of wages because the system would cause an excessive increase in burden due to the 20 percent decrease in annual labor hours per laborer, from 5200 hours to 4160 hours.

Hyundai Motors have also expressed the opinion that the necessity to receive “approval” from the labor union when constructing a foreign factory amounts to an infringement of managerial rights and is thus unacceptable.

Joong-Hyun Park sanjuck@donga.com