Union Rejects Hyundai Steel's Wage Proposal, Demands Alignment with Peer Standards
In the ongoing negotiations between Hyundai Steel and its labor union, the company’s proposed wage and performance bonuses were met with strong disapproval. On February 14, 2025, Hyundai Steel made its 21st round proposal, offering a performance bonus of 8 million won, which equates to 400% of the base salary, along with additional benefits like management performance bonuses, encouragement funds, and living support funds. While this represented a 3 million won increase from the previous round, the union found the offer insufficient, calling it "just a few more bucks" and far below the compensation provided by other major affiliates of the Hyundai Motor Group.
Discontent Over the Wage Gap
The union’s primary concern revolves around the disparity between Hyundai Steel's proposed wage package and those given by other Hyundai affiliates, particularly within the group’s automotive and supply chain businesses. For example, Hyundai Motor's compensation package included a performance bonus of 500% of the base salary, in addition to 18 million won. Similarly, other subsidiaries like Hyundai WIA and Hyundai Transys provided performance bonuses of 400% and 400% of the base salary, amounting to 17 million won and 13.2 million won, respectively.
The union’s rejection of Hyundai Steel's offer is based on the belief that their proposed compensation should align more closely with the other affiliates, reflecting the company’s performance and the financial gains it has achieved in recent years. According to the union, Hyundai Steel's offer is far from matching the higher-level bonuses granted to other group companies, which are seen as a benchmark for fair compensation.
Operating Profit Disparities
The operating profit for Hyundai Motor was the highest within the Hyundai Motor Group, totaling 15.1269 trillion won in 2023. In comparison, Hyundai Steel's operating profit amounted to 798.3 billion won, far lower than the automotive division's. However, the union argues that despite this gap, Hyundai Steel’s compensation package should reflect its financial health and performance, especially given that the company’s operating profit margin is significantly higher than some of its smaller affiliates like Hyundai Transys and Hyundai Rotem.
Hyundai Steel's operating profit margin stands at 3.1%, which is notably lower than Hyundai Motor’s 9.3%. Despite these variations, the union is insisting that the wage and performance bonuses should reflect a more equitable distribution of profits within the group.
Performance Standards and Negotiation Dynamics
The union's rejection of the proposal also indicates a strong desire to see an improved offer that aligns with the overall performance standards of Hyundai Motor Group. This includes both the level of the bonus payouts and the speed of negotiations. The union has voiced its desire for a faster resolution and the shortening of the negotiation cycle, emphasizing that the company’s willingness to reach an agreement is clear, but the terms must be adjusted to meet the expectations of its workers.
At the heart of these negotiations is the issue of fairness, whether Hyundai Steel employees should receive compensation in line with the higher levels granted to affiliates in other industries, especially when Hyundai Steel's operating profit continues to grow, albeit at a slower pace compared to other group members.
The Road Ahead
The labor union has firmly rejected Hyundai Steel's current proposal, pushing for an offer that matches the performance-based compensation provided by other affiliates within the Hyundai Motor Group. The negotiations remain ongoing, with both parties indicating a desire for a quicker resolution, but much will depend on Hyundai Steel’s ability to meet the union’s demands for fairer compensation reflective of both the company's success and its standing within the larger group.
As the talks continue, the labor union is expected to advocate for a performance bonus package on par with other group companies. This could signal significant changes in Hyundai Steel’s approach to employee compensation in the future, aligning it more closely with Hyundai Motor’s successful track record.
