Hyundai shares rises after union says it will resume talks
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SEOUL (Bloomberg) -- Hyundai Motor Co. shares rose the most in almost a month in Seoul trading after its labor union said it will resume negotiations with the company next week -- even as workers staged a one-day walkout.
The shares rose 3.4 percent to 226,000 won at the 3 p.m. close on the Korea Exchange, their biggest gain since June 18 and ending a six-day streak of declines. Affiliate Kia climbed 2.5 percent as the benchmark Kospi index advanced 1.5 percent.
Hyundai Motor’s union, which ended discussions with management June 28, has agreed to resume negotiations with the company on July 18, according to Kim Gi Hyuk, a union spokesman, and an e-mailed response from the company today. That helped raise optimism Hyundai will avert prolonged work stoppages that would dent earnings.
“I expect an agreement to be reached between the union and the company before end of August,” Shin Chung Kwan, an analyst at KB Investment & Securities Co., said by telephone. “Today’s partial stoppage is nothing Hyundai or Kia can’t overcome.”
The announcement comes two days after union workers at South Korea’s two largest automakers -- both headed by Chairman Chung Mong Koo -- voted to authorize labor leaders to stage strikes.
Employees at the carmakers are staging eight-hour stoppages today to seek higher wages and reduced working hours. Though both companies have had labor-related disruptions periodically, today’s stoppages are the first official strikes -- ones that are legally sanctioned and approved by union members through a vote -- for Hyundai since 2008 and the first at Kia since 2009.
Today’s action is also part of a broader strike spearheaded by the Korean Metal Workers Union, an umbrella labor group with about 150,000 members in the automobile, machinery, steel, and shipping industries.
The stoppages will result in 7,000 vehicles valued at 135 billion won ($117 million) in lost production for Hyundai and Kia, according to the companies.
Hyundai Motor’s management will seek further talks to resolve its differences with the union, the company said in an e-mail yesterday.Contact Automotive News