Hyundai workers launch all-out strike action

Zeno Park, Agence France-Presse, Seoul

Thousands of Hyundai Motor Co. workers launched an all-out strike Friday, demanding a 30 percent share in the handsome profits produced by South Korea's largest automaker, union officials said.

"After two hours of work, all workers laid down tools from 10:00 a.m. (08:00 a.m. Jakarta time) today," a labor union spokesman said from Hyundai Motor's main plant in the southern city of Ulsan.

A Hyundai Motor official said some 4,000 workers held a boisterous rally on the company grounds, chanting slogans.

A day of missed work means the lost production of some 5,000 cars for the company's Ulsan plant.

The strike action pulled the price of Hyundai Motor shares down 2.6 percent to 26,500 won as the overall market index was down 1.7 percent.

"We plan to stage all-out strikes today and tomorrow. The situation from the day after tomorrow will depend on how the management-labor talks will proceed," the union spokesman said.

The talks got underway on Friday afternoon after the union workers went home, the union said.

Workers are demanding management delivers on an agreement to give the union a 30-percent share in net profits, with another 30 percent going to shareholders and 40 percent to finance investments.

The company expects to reap an all-time record net profit worth 1.2 trillion won (US$940 million) this year.

This meant the union was entitled to a special bonus of more than five months' of salary and 12.9 percent wage hikes, the spokesman said. But management offered three months' of salary for the bonus and single-digit wage hikes, he said.

A Hyundai Motor official said management had not been formally notified of the union's position concerning the money.

"So far, the negotiations focused on collective bargain terms, especially official working hours. The workers want to cut four hours off the 44 hour work week," he said.

The strike came as Daewoo Motor Co., one of South Korea's three main automakers together with Hyundai Motor and Hyundai Motor's affiliate, Kia Motors, remained idle for the forth consecutive day because of a row with suppliers.

Daewoo Motor's suppliers cut off parts and components to the automaker, demanding the repayment of $1.2 billion in arrears.

But Daewoo Motor's key creditor, Korea Development Bank, dismissed the demand as excessive, noting the suppliers were already given 40 percent of arrears owed by the troubled automaker.

General Motors signed a $2 billion agreement in September to take over Daewoo Motor's three plants in South Korea and two of its 12 overseas factories, in Vietnam and Egypt.

GM has almost completed a due diligence inspection of Daewoo Motor, which collapsed last November with an estimated $17.5 billion in liabilities.

But a militant union and a controversial five-year ban on layoffs are looming large as final hurdles to the acquisition of the bankrupt automaker by GM, bankers said.

GM is demanding those parts of the collective agreement, which are seen eroding managerial rights, must be revised.

The collective agreement contains phrases that mandate prior consultations with the union ahead of any changes to the composition of the work force and a five-year ban on layoffs.