Hyundai management reached an agreement with the union to avoid a strike.

According to foreign media reports, on the evening of July 20, Hyundai Motor reached a preliminary agreement with the trade union on a pay rise and improvement of working conditions, avoiding a strike.

During the negotiations on July 20, the two sides reached an agreement, including an increase in the monthly base salary of employees by 75000 won (about US $65), a bonus to 200% of their monthly salary, and an additional bonus of 3.5 million won.

The interim agreement is important for Hyundai because it reduces the company's risk, analysts said on July 21. At present, various car companies are shifting their focus from traditional fuel vehicles to electric vehicles. In addition, the shortage of chips has also seriously affected the production of cars.

"although this agreement has to be voted by union members, it is a positive thing for both the company and the union to avoid a strike for three years in a row," said Kim Pil-soo, a professor of automotive technology at (Daelim University College) at Dalin University. Hyundai reached pay agreements with unions in 2019 and 2020.

In order to protect jobs, the two sides also agreed that South Korean factories and research centers will play a leading role in Hyundai's global business facilities. The agreement will come into force if union members vote to accept the terms on July 27th.

Hyundai said on July 21 that it "will focus on overcoming the looming crisis on the basis of strong industrial relations, at a time when the auto industry is in an important transition period". The company also said: "We will work together to become the world's top enterprises in the future travel era by improving disaster prevention capabilities and quality competitiveness."

"the automotive industry plays a very important role in employment, with far more employees than the semiconductor industry, so it is a good thing that Hyundai management has reached an agreement with the union," said an industry representative. "

In the long run, however, there have been doubts about Hyundai's ability to solve labour problems smoothly, as the company is under pressure to reduce the size of its workforce. "given South Korea's rigid labor market, many companies find it very difficult to do business in South Korea," said Kim of Olin University. In the process of developing electric vehicles, it is necessary for car companies to lay off staff, but there will be a lot of problems in the future, because the scale of layoffs will reach about 30% to 40%. If this problem is not solved in the future, it will become a major obstacle to the development of South Korean industry. "