Hyundai stares at big wage war, strike in home base. How it could affect sales

  • Workers of Hyundai in South Korea are demanding higher wages and an extension of retirement age.
File photo used for representational purpose. (REUTERS)
File photo used for representational purpose.

Hyundai Motor is facing a crisis in its home base of South Korea after a government organisation gave the green signal for unionized workers of the carmaker to go on strike. The protesting workers have been demanding a hike in wages and for the retirement age to be increased.

South Korea's National Labor Relations Commission has permitted for Hyundai's unionized workers to go on strike. Reuters, citing local reports, highlighted that these workers are now planning to gather and chart out their next course of action even though talks with the company management will continue as well.

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The protesting workers had previously threatened to walk out unless Hyundai management agreed to their twin demands of wage increase and extension on the retirement age. The talks thus far has led to nothing significant.

Wage war at Hyundai: Potential fallout

If the unionized workers do go ahead with a general strike, this would turn out to be the first wage-related conflict at Hyundai in South Korea in five years. And it could not come at a worse time for the Korean car giant as it has been looking at ramping up production that has already taken a hit due to supply-related shortages.

A strike in the times to come could wreck havoc with delivery timelines of Hyundai models to the South Korean buyers, potentially ushering these customers towards rival brands. This especially so because the current inventories are rather minuscule.

It is further reported that Hyundai may be facing an operational loss of 1 trillion won ($755.37 million) if the strike does go ahead.

First Published Date: 28 Aug 2023, 15:12 PM IST

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