2013 Hyundai SonataEnlarge Photo
Bad news for the bigwigs at Hyundai and Kia: workers at the companies' facilities in South Korea have voted to strike.
The upside? Unlike walkouts of previous years, these won't last very long, and they aren't likely to affect vehicle availability in the U.S. or anywhere else.
Approximately 71% of Hyundai's 44,857 union workers joined 67% of Kia 30,176-member union in voting for a strike. The workers are demanding increased wages and better hours.
Strikes: yesterday and today
Hyundai and Kia workers are no strangers to strikes. In fact, since Hyundai workers first unionized in 1987, they staged walkouts nearly every year until 2009. Collectively, those strikes have cost Hyundai about 1,000,000 vehicles in lost production and roughly $10 billion in lost sales.
This time around, though, things shouldn't be so bad. For starters, the unions' demands aren't too severe: an extra $130 per worker per month, and a request that 30% of company profits go to performance-based pay. Compared to previous years' asks, those are pretty meager.
The biggest sticking point may be a proposed change in hours. Workers for both companies are asking for the elimination of the midnight-to-8am shift, to be replaced by a double-shift during the day.
Unlike the last strikes at Hyundai in 2008 -- which resulted in a staggering loss of 44,645 vehicles and about $599 million in profits -- the 2012 walkouts will be conducted in a very limited, organized fashion. They'll begin tomorrow at Hyundai and Kia plants in South Korea and last for a total of eight hours. An additional strike is planned for July 20 at Kia facilities. (Kia's last major union strikes were in 2009.)
In the meantime, management will continue negotiations with the unions. Assuming that all goes amicably, these minor stoppages won't result in major shortages, since production can be made up with a few extra shifts.
How will this affect shoppers?
For most new-car buyers, these walkouts won't affect the shopping experience at all, since Hyundai and Kia are international corporations with decentralized systems of production.
It's true that Hyundai and Kia continue to manufacture many popular rides in South Korea -- rides like the Hyundai Genesis. But as the companies continue to grow and expand, they've added production facilities in other parts of the globe. For example, Hyundai Sonatas are built in Montgomery, Alabama, and Kia Sorentos are assembled in Georgia.
If the strikes prove onerous enough, then yes, there's the possibility that they could impact vehicle inventory here in the States. However, given (a) the management's long history in dealing with strikes and (b) the workers' comparatively simple demands -- not to mention the fact that the unions possess increasingly less power and generate increasingly less sympathy from the South Korean public -- we wouldn't expect this stoppage to last.
We'll keep you posted.