FILE PHOTO: The logo of Hyundai Motor is seen during the 2017 Seoul Motor Show in Goyang, South Korea, March 31, 2017. REUTERS/Kim Hong-Ji
SEOUL (Reuters) – Hyundai Motor Co (005380.KS) and its South Korean union reached a tentative wage deal and averted strike action for the first time in eight years, a union spokesman said on Wednesday.
The union took into account “the uncertain political and economic situation” stemming from a U.S.-China trade dispute and South Korea’s spat with Japan, it said in a statement.
The union has staged strikes in all but four years since it was created in 1987. But it has faced growing public and media criticism for walking out despite workers’ relatively high wages and as the economy slows down.
“We have focused on escaping social isolation,” the union said in a statement.
Japan has dropped South Korea from its “white list” of countries with fast-track trade status, effective on Wednesday, deepening a decades-old dispute over the countries’ wartime history and clouding the economic outlook for South Korea.
The U.S.-China trade war meanwhile is playing havoc with global supply lines and markets that are vital to South Korea’s major exporters including tech giants and carmakers.
The latest wage agreement includes payments up to 9 million won ($7,414), 15 company shares each, payments equivalent to one and a half months’ salary and a basic salary increase of 40,000 won.
The deal, if approved by union members in a vote on Monday, will help Hyundai Motor avert production losses as it tries to regain ground in the U.S. market with its new Palisade SUV, shipped from South Korea.
The two sides reached the deal “to survive in the future” amid the uncertain business environment and the rapidly-changing paradigm in the auto industry, Hyundai Motor said in a statement.
Reporting by Hyunjoo Jin; Editing by Sandra Maler and Stephen Coates