SEOUL -- Hyundai Motor Co.'s South Korean labor union staged its first full nationwide strike in 12 years today over stalled wage talks, putting the automaker's earnings and sales targets at risk.
The full-day walkout came after a series of partial 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.
The disruption, led by union boss Park You-ki, has led to lost production of 114,000 vehicles worth 2.5 trillion won ($2.26 billion) as of today, the biggest strike-related output loss for the automaker in terms of value of vehicles.
The union plans to stage a partial strike for the remainder of this week and stoppages could continue into next week depending on the company's response, union spokesman Jang Chang-yeal said.
"This year's strike is lasting longer than expected. The third-quarter earnings should disappoint," Samsung Securities auto analyst Eim Eun-young said, also citing weak domestic demand.
Hyundai, the world's fifth-biggest automaker along with Kia Motors, said in a statement it was "obviously disappointed" with any halt in production and was continuing to work with the union to resolve the dispute.
Hyundai Motor's unionized workers in South Korea last month overwhelmingly voted down a tentative wage deal which was less generous than last year's package.
Trade Minister Joo Hyung-hwan urged Hyundai Motor's union to resolve the dispute, saying the strike would "throw cold water on the exports recovery."
He said India overtook South Korea as the world's fifth-biggest car producing country from January to July this year, adding that rigid industrial relations and higher wages would worsen the competitiveness of the domestic car industry.
Hyundai 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 SUVs.
Analysts expect Hyundai Motor to post weaker-than-expected profits for the third quarter, hit by the strike and slowing domestic demand after a cut in excise tax expired in June.
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, NH Investment & Securities analyst Cho Soo-hong said.
Hyundai Motor has been hit by strikes in all but four of the union's 29-year history.