Source Pravda.Ru

Hyundai Motor Workers to go on strike

Unionized workers at South Korea's top carmaker Hyundai Motor Co. will hold brief strikes this week, although analysts said inventory levels should provide a buffer for exports that make up 70 percent of the firm's sales.

Poor labor relations are a main hurdle threatening Hyundai's goal of becoming a global top five carmaker by 2010.

The firm traditionally faces tough annual wage negotiations with its union, the country's biggest and the most powerful arm of the militant Korean Confederation of Trade Unions.

Union members will stop work for 2 hours on Thursday and for 6 hours on Friday, the union said on its Web site. More than 70 percent of union members had voted to strike on Tuesday.

So far this year, South Korean firms have had comparatively few interruptions from strikes. Although 248 strikes have been called this year, compared with 462 for the whole of 2004, data from the commerce ministry show the total number of lost working days from strikes has been 282,920 so far this year, well off the pace of 1.2 million days in all of 2004.

The union at Hyundai is seeking a monthly basic salary hike of 109,181 won - or about 8.5 percent of the average basic salary -- plus an 800 percent bonus payment and incentive payments worth 30 percent of the company's net profit, among other requests, according to a statement on the Web site, reports Reuters.

"We hope to reach a compromise with the management as soon as possible if the company provides reasonable suggestions," said Jang Kyu-ho, the trade union's spokesman.

News of the strike sent Hyundai Motor shares 3.3 percent lower to close Wednesday at 69,600 won ($68).

The planned strike "will have only a temporary impact on Hyundai's shares as short term investors are likely to take profits," Kim Hag-ju, an analyst at Samsung Securities, wrote in a report. "Considering the firm's inventory levels, damage to its sales will be minimal."

Hyundai, which is aiming to become the world's sixth-largest carmaker along with its affiliate Kia Motors Corp. by 2010, currently has production capacity of 2.65 million vehicles annually worldwide.

More than 70 percent of Hyundai's output is manufactured in South Korea.

Last year, Hyundai's union staged a five-day strike between late June and early July, which cost the company about 263.1 billion won ($256 million) in production losses, informs Washington Post

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