Labor dispute brewing at Hyundai Motor amid EV transition
SEOUL, June 30 (Korea Bizwire) – Hyundai Motor Co. is moving towards electric vehicles to join the global automotive trend, but its employees at the leading automaker are worried about the prospect of reduced assembly work and want job security in an environment evolving business.
The Hyundai Motor union is bracing for a battle after failing to narrow differences with management over wage hikes and working conditions despite 13 rounds of bargaining for this year’s collective agreement.
On Wednesday, the union warned it would hold a vote next week among around 50,000 members to decide whether to strike because management’s offer was “not acceptable.”
Hyundai union workers have not staged a walkout for the past two years amid sluggish sales, a rare move for the nation’s largest union known for its tough stance, but market watchers say it didn’t may not be the case for this year.
The union called on the company to increase wages and incentives, extend the retirement age from four to 64, and give national factories priorities for future production of electric vehicles.
Among other things, management has expressed opposition to the union’s call for a change in the retirement age over concerns about job flexibility.
Market watchers say the professional concerns of aging assembly workers are partly due to the fact that electric vehicles are manufactured differently from conventional vehicles.
The transition from internal combustion engine cars to electric vehicles is expected to result in a major shift in manufacturing processes, as electric vehicles require fewer parts and labor hours to be built.
Instead of a powertrain made up of an engine, transmission, and other components, EVs run on electric motors, batteries, and need more chips, which are mostly supplied outside of the box. the automaker’s vertically integrated supply chain.
The number of components used in electric vehicles is expected to decrease by 37% compared to internal combustion engine cars, and a 10% increase in domestic production of electric vehicles will cut more than 4,700 jobs next year, said the Korean Automobile Manufacturers Association (KAMA) in a report. .
Although Hyundai workers agree that a transition to electric vehicles is the right step, unionized workers have urged the company to spend more money to expand the local manufacturing base and have expressed concerns over its plans to investment abroad.
Last month, Hyundai Motor Group, the parent company of Hyundai and Kia, announced that it pay $ 7.4 billion to the United States until 2025 to build EVs and develop future mobility solutions.
Industry watchers expect Hyundai, the maker of the Ioniq 5, to begin production of electric vehicles at its Alabama plant next year to target the growing U.S. market as part pro-electric vehicle policies of the Joe Biden administration.
Investors hailed Hyundai’s U.S. investment plan to expand its presence in the key market, but its union called on the company to increase domestic production capacity for electric vehicles.
âThe company needs to strengthen the capacity of national factories by increasing investment in new mobility solutions,â the union said. “Although operations of factories abroad are inevitable due to tariffs, they are sufficient at current levels.”
Another thorny issue is the union’s call to raise the retirement age, which sparked widespread public debate after unions from the country’s three automakers – Hyundai, Kia and GM Korea – filed a petition with The national assembly.
The petition calls for raising the retirement age from 60 to 64, one year before workers become eligible for the national pension, in line with longer life expectancy in Asia’s fourth-largest economy.
“When workers retire at age 60, a physically active age, they face greater financial pressure at older ages, and the low birth rate could lead to a labor shortage in the workforce. future, “the auto unions wrote on June 11.
“If the retirement age is extended as part of the national pension system, it would help workers have a stable post-retirement life and companies could produce high-value products with a seasoned workforce. “
At Hyundai, around 15,000 employees of its production lines are expected to retire by 2025, according to the union.
Young white-collar workers are not on the same page, believing that they cannot benefit as much from the increased retirement age as blue-collar baby boomers.
People in their 20s and 30s, commonly referred to as Generation MZ (Millennials and Generation Z), feared that increasing the retirement age would make it rather difficult for companies to hire new employees, prioritizing increasing performance-based incentives.
“Rather than seasoned workers, companies need employees who can adapt to changing technology at the right time,” wrote a self-proclaimed “generation MZ worker on the production line.” one of the automakers on the site of the presidential petition on June 15.
âIf the retirement age is pushed back now, it would be more difficult for companies to hire smart young workers suited to the changing business environment, which would worsen youth unemployment. “
Lee Dong-hak, a senior member of the ruling Democratic Party, says retirement age changes require discussions in response to the rapidly aging population, but generational conflict is inevitable in the auto industry where jobs are down.
âWhat is happening at Hyundai Motor illustrates the whole company,â Lee, 39, wrote in a Facebook post. “It’s a zero-sum game between the older generation who want to stay in the workforce longer and the younger generation who want a job.”
Experts say the auto industry needs to explore ways to change the structure of employment by increasing investment in electric vehicle components and training displaced workers for a smooth transition to electric vehicles.
âAlthough assembly workers are being reassigned to new production lines in line with the transition to electric vehicles, retraining the workforce is still not enough,â said Lee Hang-koo, researcher at the Korea Automotive Technology Institute.
âAs the auto industry has a wide range of supply chains, the government must also prepare for the change in workforce and come up with job security measures. “