Hyundai Motor’s labor union has secured the legal right to strike, just one day after the National Assembly passed the so-called Yellow Envelope Act, raising concerns over potential disruptions to production lines already strained by tariff pressures and global market uncertainties.

On the morning of August 25, out of Hyundai Motor’s 42,180 union members, 39,966 (94.75% turnout) voted in a mobile strike authorization ballot, with 36,341—equivalent to 86.15% of total members and 90.92% of voters—supporting strike action. Opposition votes numbered 3,625 (8.59% of total members), while abstentions amounted to 2,214 (5.25%).

The same day, the Central Labor Relations Commission declared a halt to mediation due to unresolvable differences between labor and management, formally empowering the union to conduct a legal strike.

The union will determine the timing and scale of any industrial action at its Dispute Countermeasures Committee meeting on August 27, with an official committee inauguration set for the following day. Whether a full-scale walkout actually takes place remains uncertain: although the union authorized a strike last year, both sides reached a tentative agreement just two days before action was set to begin.

The core of this year’s demands centers on four key areas: extending the retirement age, reducing working hours, retroactively compensating for ordinary wage shortfalls, and overhauling the wage structure.

Specifically, the union seeks to extend the mandatory retirement age from 60 to 64. While current practice allows for “skilled re-employment” in contract form for 61- and 62-year-olds, the union argues this system lacks job security, calling for union membership rights for re-hired retirees and the establishment of a support center for former employees.

A further flashpoint is the push for a 4.5-day workweek, reducing Friday working hours to 4 and the weekly total to 36, without any reduction in pay.

Retroactive compensation for ordinary wages also remains critical. Citing a Supreme Court ruling last year, the union demands an average of 20 million won per member in back pay—posing an estimated burden of around 820 billion won ($600 million) on the company, given its 42,000 union workforce.

Additional demands, deemed “unprecedented” in the industry, include a base salary increase of 141,300 won, performance bonuses equaling 30% of last year’s net profit, and a significant hike in incentive payout ratios, raising annual bonuses from 750% to 900% of base wage.

Management, however, highlights mounting internal and external uncertainties—most notably, tariff pressures from the United States and a sluggish EV market. Hyundai Motor’s operating profit for the first half of this year fell 7.7% year-on-year to 7.24 trillion won, with accumulated losses from tariffs adding to concerns that a strike would lead to even costlier production losses.

Industry watchers warn that the Hyundai Motor union’s acquisition of strike rights could trigger similar action across the automotive sector. Kia’s labor union, for example, is pursuing comparable wage and bonus increases, and is even floating the idea of a four-day workweek—raising the specter of a domino effect and widespread industrial unrest.

Given the potential knock-on effects for Korea’s automotive exports, component suppliers, and regional economies, some warn that the crucial “golden time” for labor-management compromise is rapidly closing. Some optimism persists, however, with speculation that both sides may still reach a last-minute deal—especially in light of Hyundai’s seven-year run without labor disputes and global tariff headwinds. Yet, with 17 rounds of negotiations yielding no progress and official mediation suspended, experts caution that, absent a clear breakthrough, an extended confrontation may be inevitable.

Note “This article was translated from the original Korean version using AI assistance, and subsequently edited by a native-speaking journalist.”

Photo=Yonhap News