Hyundai Motor, South Korea’s largest automaker, on Monday filed a lawsuit against the leaders of its labour union, suing them for $1.1m in damages resulting from continuing protests that are eroding the company’s competitiveness and profitability.
Workers in Hyundai’s 44,000-strong union have been refusing to work overtime since December 28, and last week threatened to take wider action unless the company pays workers the maximum year-end bonus.
Hyundai lodged a lawsuit against 26 union leaders at the Ulsan District Court on Monday, said Jake Jang, a company spokesman, adding that the refusal to work overtime had cost the company about 7,800 vehicles, or Won120bn in lost sales.
Although Hyundai has filed similar suits against the union nine times before, it has always withdrawn them after the union responded with threats of even more disruptive action. But the company is now taking an unusually strong stance.
“There will be no concession to the union – from now on we want to comply with rules and regulations,” Mr Jang said. “So we can’t tolerate these kinds of obstructions that are severely damaging our competitiveness in the global market.”
Unionised workers have been refusing two-hour overtime shifts to protest against the company’s decision to pay 100 per cent of their monthly salary as a year-end bonus, rather than 150 per cent, after failing to meet targets that had already been reduced to take into account a strike in July.
Hyundai expected that its Korean factories would produce 1.767m vehicles last year, but cut the target to 1.647m after the month-long strike in the summer, which severely hindered domestic production. However, Korean output amounted to only 1.622m units.
The union had threatened to strike from last Friday if full bonuses were not paid, and although they have not yet taken such action, workers staged an all-night protest vigil on Thursday and have pledged to dispatch their largest-ever squad of protesters to Hyundai’s headquarters in Seoul tomorrow .
The dispute was exacerbated when union members violently disrupted a New Year ceremony at the carmaker’s main Ulsan factory last week, leaving several senior executives injured and smashing glass doors.
Labour unrest is cited as a chief obstacle to Hyundai joining the top rank of global carmakers. Unionised workers there have walked out each year since 1987, except for 1994. Last year, workers called for a 9.1 per cent wage rise but settled for 5.1 per cent.
Shares in Hyundai Motor closed 0.6 per cent lower at Won64,900 yesterday.