Strike threatens Hyundai sales boom

REUTERS

A deserted assembly line in the main Hyundai plant at Ulsan, about 410km southeast of Seoul, during a Metal Workers Union walkout.

Union members at South Korea's top automaker, Hyundai, started a partial strike on Wednesday, sparking fears of vehicle shortages caused by robust sales abroad.

The company said its 44 000-strong Metal workers Union downed tools for two hours on Wednesday, demanding higher wages and an end to night shifts. The union staged its first strike in four years last month.

Unionists will stage a three-hour stoppage on Thursday and four-hour strikes on Friday and next Monday and Tuesday. They will stop work for two hours on Friday next week.

The union at Hyundai's affiliate Kia plans an eight-hour strike on Friday and will refuse to work overtime from next Monday.

The labour action came as Hyundai and Kia, which together form the world's fifth largest automaker by sales, posted robust sales in the first half of 2012 despite the global economic downturn.

Hyundai's first-half sales rose 11.5 percent from a year earlier to 2.18 million, or 51 percent of its annual target of 4.29 million.

Unlike South African strikers, who toyi-toyi and smash things, South Korean auto industry workers sit in neat rows on the ground outside the Hyundai plant in Ulsan and shout slogans.

REUTERS

Kia sold 1.39 million units globally in the first six months, up 12 percent from a year earlier.

Hyundai called for a quick settlement of the disputes.

It said the the company and union should join forces to ride out an unpredictable business environment.

“We must work together to ride out the economic crisis instead of wasting time on wrangling,” the company said in a message to workers.

Hyundai predicted steady growth in the second half thanks to robust overseas sales, especially in the United States and Europe.

But analysts said further strikes would hurt sales at both companies because their inventories are already at record-low levels.

Suh Sung-Moon of Korea Investment and Securities said a prolonged labour action “would mean a blow to their third-quarter results”.

John Krafcik, chief executive for Hyundai's US operations, said in July the company was facing vehicle shortages in the United States after a 10 percent sales increase in the first half. - AFP

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