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Hyundai Motor |
[Alpha Biz= Kim Jisun] Hyundai Motor Company’s labor union, the largest in South Korea by membership, has announced its key demands for the 2024 collective bargaining agreement, including the introduction of a 4.5-day workweek and an extension of the retirement age from 60 to 64. These proposals, disclosed during a delegates' meeting held on May 28 at the Ulsan Culture Center, have sparked discussion across the South Korean corporate sector.
The union's official proposal includes a base monthly wage increase of KRW 141,300 (excluding step-based raises), and a performance bonus equivalent to 30% of Hyundai Motor's net profit from the previous year. Additional demands include income tax compensation due to recent legislative changes, broader application of ordinary wages, the hiring of new workers, and revisions to the collective agreement reflecting the proposed workweek and retirement changes.
Despite Hyundai Motor facing pressure on profitability, particularly following the U.S. imposition of a 25% tariff on EV imports, the union aims to begin formal negotiations in mid-June after submitting its proposal to management on May 29.
Industry observers believe the 4.5-day workweek and retirement age extension could become key topics in this year’s negotiations. The 4.5-day system, first mentioned by the union as a separate request last year, has now been formally included in the collective bargaining agenda. Kia, Hyundai's sister company, is also reportedly planning to pursue the same initiative. In a recent newsletter, the Kia union stated it is committed to achieving the 4.5-day workweek to promote better work-life balance.
The retirement age extension proposal is based on the government’s plan to raise the national pension eligibility age from 63 to 65 by 2033. The union argues that company retirement should be extended accordingly to 64.
However, industry experts have voiced concerns about the potential negative impact on productivity. The Korea Employers Federation (KEF) highlighted that South Korea's average annual working hours per employee have already dropped from over 2,200 in 2008 to around 1,800 in 2023—one of the steepest declines among OECD countries.
Lee Dong-geun, Vice Chairman of the KEF, commented that while the 4.5-day workweek can be flexibly implemented without reducing the legal 40-hour workweek, extending the retirement age must be approached carefully. He emphasized the need for a reformed wage system and more flexible employment practices, suggesting a post-retirement reemployment model as a more sustainable alternative.
The Hyundai and Kia unions are expected to push for significant wage increases this year, leveraging their companies' record-high revenues in 2023. A recent union survey showed that 60.5% of Hyundai Motor union members (out of 27,534 respondents) support demanding a performance bonus of KRW 35 million to KRW 40 million per person.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
