Hyundai And Kia Workers Go On Strike
|   Friday, July 13, 2012
There is nothing new to strikes. Almost every company on the planet has experienced them and every time, money was lost. This time the workers at Kia and Hyundai factories located in South Korea have decided to go on a strike. The only piece of good news is that this strike doesn't have any plans to last long enough for production to be seriously affected. This means that shipment flow to world markets will not be significantly affected, unlike other years when strikes took place.


In numbers, about 71 % of Hyundai's 44,857 union workers stood alongside their comrades from Kia in voting for a strike; 67% of Kia's 30,176 strong union voted for the strike. The workers are demanding better wages and hours.

If we take a look at history, this issue was a serious matter for the companies, especially Hyundai. Back in 1987, Hyundai allowed its workers to form unions, and they paid dearly for it. Up to 2009, rarely had a year passed in which strikes were not organized. That meant about 1 million cars lost in production as well as cash losses of 10 billion dollars. This is some serious stuff we are talking about.

Maybe the workers have taken that into account or their leaders are growing soft, but this time demands are not at all excessive. They only ask for an extra 130 dollars per man per month, while another 30 % of the company's profits will go into performance-based pay. Those parts have a good chance of being approved, unlike the other demand.

Workers demand a change in shifts. They want the 12 AM to 8 AM shift to end and be replaced by daytime double shifts. A lot of calculation will go into this before any answer will be given.

Compared to the 2009 strike when Hyundai lost about 44,645 vehicles and 599 million dollars in profits, the strike on the 13th of July will only last for about 8 hours. Losses will be minimal this way. As already mentioned, Kia will join on this strike too. If nothing is resolved, another strike is programmed on the 20th of July at Kia's South Korean plants. They too are getting back in business after a 3 year pause in strikes.

The management will have a tough time at the negotiation table, but this will have little effect, if any, on worldwide buyers. Due to the fact that Kia and Hyundai are international companies, the production chain is not dependent on one location alone. They have factories everywhere on the planet, including in the US (Montgomery, Alabama, for Hyundai and Kia has one plant in Georgia). Also, dealerships have a few cars on stock, so unless suddenly everyone discovers how grand the two brands are, new buyers will not feel any discomfort at all.

A production halt of 8 hours is not enough to do significant damage, but if no demand is solved, those 8 hours might turn into tens or hundreds of hours; given Korean experience with strikes, that doesn't seem too likely.
PHOTO GALLERY
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