Hyundai Motor Co. reached a tentative deal with its unionized workers in South Korea following a close vote in favor of a proposed payment raise, putting an end to walkouts which may cost the company more than $800 million in lost output.
Union spokesman Hwang Ki Tae announced that the long-expected settlement between labor representatives and the South-Korean car maker, which included an increase of the employees monthly base salaries by KRW98 000, was supported by the companys 47 000 guild members.
As reported by the Wall Street Journal, the spokesman shared on Tuesday: “The management and workers agreed to cooperate with each other as business conditions are worsening.”
The preliminary agreement reached on Monday was supported by a total of 51.5% of the voters of Hyundai, while 48.1% rejected the deal. The settlement was also confirmed by a Hyundai spokesman.
A partial strike was resumed last week by the unions 47 000 members after Hyundai and its affiliates Kia Motors and Hyundai Mobis purchased a $10-billion real estate located in Seoul, a price three times higher than the appraised value of the land.
The deal comes as a relief for Hyundai as damages to the company may have amounted to as much as KRW900 million from lost output of 40 000 vehicles. The latest pay agreement comprises bonuses and incentives totaling KRW8.9 million, in addition to payments equaling 4-1/2-months salary.
As reported by Bloomberg, one of the analysts, who work at Tongyang Securities Co. – Nam Kyeong Moon commented before the results of the agreements vote were announced, saying that a ratified settlement “will be good news for the company. The deal will stabilize production and Hyundai will be able to make up for the loss from strikes in the fourth quarter.”
Hyundai Motor Co. closed 1.05% lower at KRW188 500 per share on Thursday in Seoul, marking a one-year change of -23.84% and valuing the company at KRW39.65 trillion. According to the Financial Times, the 32 analysts offering 12-month price targets for Hyundai Motor Co. have a median target of KRW287 500, with a high estimate of KRW330 000 and a low estimate of KRW200 000. The median estimate represents a 52.52% increase from the last price of KRW188 500.
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