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A union representing Hyundai Motor (OTCPK:HYMTF) automobile workers in South Korea said members approved a possible strike action. A vote was taken on Monday after negotiations broke down between the automaker and the union over wage increases and an extension of the retirement age.
The union said almost 90% of its 43,000 members approved the strike action. A strike at Hyundai (OTCPK:HYMTF) would be the first in six years related to wage negotiations.
The union is asking for a minimum basic monthly pay increase of 159,800 won ($115) and performance pay equating to 30% of Hyundai’s (OTCPK:HYMTF) 2023 net profit. The union also wants to see an increase in the retirement age to 64 from 60 due to the rising life expectancy in South Korea and inadequate retirement pension payments.
A Hyundai Motor (OTCPK:HYMTF) union official said the company is still open to having negotiations with the management if they are willing to change their stance. The union and the management have already had eight rounds of wage talks.
While it is still unclear if the labor standoff will lead to a strike and loss of production for Hyundai (OTCPK:HYMTF), analysts say the threat that short-term sales could be impacted could weigh on the stock. Hyundai (OTCPK:HYMTF) also has plants in India and Brazil, as well as a large manufacturing site in Alabama.
Hyundai (OTCPK:HYMTF) has ranked third for the last three years in global automobiles sold, after Toyota Motor (TM) and Volkswagen (OTCPK:VLKAF).