(Add details of the deal, company comments)
SEOUL Oct 12 Hyundai Motor reached
a tentative wage pact with its South Korean labour union on
Wednesday after the worst strikes in the automaker's history
disrupted output at its domestic production base.
The agreement is subject to a vote by almost 50,000 union
members on Thursday, who rejected an earlier deal in August
because of it was less generous than the previous year's
The union has held 24 rounds of full-scale or partial
strikes since July 19, preventing the automaker from making
131,851 vehicles worth more than 2.9 trillion won ($2.60
billion), the government said last week.
"The company and the union have formed a common ground that
we should prevent further catastrophe as a prolonged strike has
had a substantial impact on not only the company but the
regional and national economy," Hyundai Motor said in a
Under the latest agreement, Hyundai will increase basic
monthly pay by 72,000 won; give each worker a one-off payment of
3.3 million won as well as bonus and incentives payments worth
3.5 times their basic monthly wage; and each worker will also
receive 10 Hyundai shares, the company said.
The deal came after the government threatened to intervene
to suspend strike action, criticising the union for walkouts
despite relatively high wages at the automaker.
The prolonged labour disputes coupled with sluggish domestic
demand have prompted some analysts to cut earnings forecasts for
the July to September quarter which the company is scheduled to
report late this month.
Twelve out of 25 net profit estimates have been revised down
in the past 30 days, pushing the average estimate 12 percent
lower, according to Thomson Reuters StarMine.
Hyundai Motor, which is the world's fifth-biggest carmaker
including affiliate Kia Motors, has been hit by
strikes in all but four of the union's 29-year history though it
usually made up for lost production by the end of each year.
(Reporting by Hyunjoo Jin; editing by David Clarke)