Hyundai Motor union stages first full strike in 12 years
Hyundai Motor's South Korean labor union staged its first full nationwide strike in 12 years on Monday over wages, putting the automaker's earnings and sales targets at risk.
The full-day walkout came after a series of partial, sporadic stoppages since July at the automaker's factories across South Korea, its biggest manufacturing base which produces nearly 40 percent of its vehicles sold globally last year.
Sporadic strikes since July had led to lost production of 101,400 vehicles worth 2.23 trillion won ($2.02 billion) as of Friday, the biggest output loss for the automaker in terms of the value of the vehicles.
"This year's strike is lasting longer than expected. The third-quarter earnings should disappoint," Eim Eun-young, an auto analyst at Samsung Securities, said, also citing weak domestic demand.
Hyundai, the world's fifth-biggest automaker along with Kia Motors, said in a statement on Monday it was "obviously disappointed" with any stoppage in production and was continuing to work with the union to resolve this dispute.
Workers have not put a timeline on the strike, saying it depends on the outcome of wage negotiations.
Late last month, Hyundai Motor's unionized workers in South Korea overwhelmingly voted down a tentative wage deal which was less generous than last year's package.
Hyundai Motor has been hit by strikes in all but four of the union's 29-year history, although it usually makes up for lost output by the end of each year.
The company posted its tenth consecutive quarterly profit fall in the April-to-June period, hit by an emerging market downturn and its failure to tap into strong global demand for sport utility vehicles.
Cho Soo-hong, an analyst at NH Investment & Securities, said Hyundai and Kia Motors were expected to see global sales slip 0.6 percent to about 7.96 million vehicles this year, below their targets of 8.13 million vehicles.
Shares of Hyundai Motor were down 1.8 percent at 139,500 won ($126.43) as of 09:11 pm EDT , about half of the record-high level posted in May 2012.