Hyundai workers strike to protest $10B land deal
Sep. 25, 2014
SEOUL, South Korea (AP) — Thousands of Hyundai Motor Co. workers are striking to protest the South Korean automaker's decision to spend $10 billion on land for a new headquarters while wage negotiations remain stalled, a union said Thursday.
Union spokesman Hwang Ki-tae said the mood among workers turned sour after a Hyundai-led consortium offered 10.55 trillion won ($10.1 billion) for land in Seoul's upmarket Gangnam district. About 47,000 workers are walking off the job for a total of 12 hours from Tuesday to Friday. Hyundai has about 60,000 workers.
Since June, the union has been in talks to negotiate new terms for wages and benefits. The latest talks broke down after the company refused to accept the union's proposal, citing cost issues.
Hwang said the land deal showed that Hyundai's position could not be justified. Hyundai is paying about three times the land's value to squeeze out other bidders.
The union's demands include changing the employment status of temporary workers at Hyundai production lines to full-time employment. The union also wants the company to count bonuses as part of regular wages, which are the basis for calculating pension and paid leave entitlements.
In the statement on its website, Hyundai's union said the company refused to accept the wage terms citing the cost of 1.4 trillion won. The company declined to confirm the figure.
Hyundai Motor said the new headquarters in the posh district of Seoul would increase its brand value. It plans to turn the 79,342 square meter (854,030 square foot) plot of land into an attraction modeled after Autostadt, Volkswagen's automobile-themed attraction in Wolfsburg, Germany.
But Hyundai Motor's share price has plummeted to its lowest level in more than one year since the land deal was announced last week.
The purchase sparked criticism that Chung Mong-koo, chairman of Hyundai Motor and the son of its founder, was wielding outsized influence over the company.
Solidarity for Economic Reform, a civic watchdog that focuses on South Korea's family-controlled business groups known as chaebol, said the astronomical purchase price suggests that the board's decision-making may have not been transparent and reasonable.
"Shareholders' benefit has been completely ignored," the watchdog said in a statement.