SEOUL — Hyundai Motor and its South Korean workers’ union have reached a tentative wage deal and averted strike action for the first time in eight years.
The union said it considered “the uncertain political and economic situation” stemming from a diplomatic spat with Japan as well as a U.S.-China trade dispute.
Under the latest wage agreement, each unionized worker will receive a one-off payment of up to 9 million won ($7,414), an additional payment equivalent to one and a half months’ salary, 15 Hyundai Motor shares, and a basic salary increase of 1.74 percent.
The basic salary increase is the lowest since at least the 2009 global economic downturn.
Hyundai’s unionized workers in South Korea have staged strikes in all but four years since the union was created in 1987. But the union has faced growing public and media criticism for walking out of wage talks despite workers’ relatively high pay and at a time of economic slowdown.
“We have focused on escaping social isolation,” the union said in a statement.
The deal is subject to approval from union members in a vote on Monday.
South Korea has been dropped from Japan’s “white list” of countries with fast-track trade status, effective Wednesday, deepening a decades-old dispute over the countries’ wartime history and dimming South Korea’s economic outlook.
The U.S.-China trade war meanwhile is playing havoc with global supply lines and markets vital to South Korea’s major exporters including automakers.
Hyundai and the union reached their deal “to survive in the future” amid the uncertain business environment and rapidly changing auto industry bent on electrification and autonomous vehicles, the automaker said in a statement.