Labour woes continue to dog Hyundai; April exports slump

SEOUL Thu May 2, 2013 4:25am EDT

SEOUL May 2 (Reuters) - South Korea's Hyundai Motor Co said its domestic plants may not resume weekend work this Saturday as hoped due to internal union conflict over wage agreements, even as a slump in its April exports underscored the toll from its labour disputes.

After Saturday output stoppages in March and April, Hyundai's union leadership agreed to a wage pact with the company and to restart weekend production. But opposition within the union from the heads of nine divisions at Hyundai's biggest production base is set to derail that deal.

"It may be difficult to resume weekend production this week because of conflicts within labour factions," said a Hyundai spokesman.

The lost production of some 48,000 vehicles hurt the automaker's earnings in the January-March period. Hyundai is likely to make up that output later in the year, but failure to resolve its labour woes soon could weigh on its U.S. sales in the months ahead, particularly as it is currently underperforming the industry due to stretched manufacturing capacity.

A senior union official, who declined to be identified as he was not authorised to speak to the media, said the nine divisions will continue to refuse to work this Saturday.

"(The heads) demand union leadership apologize for unilaterally pushing for the deal, and discuss weekend wages in upcoming annual wage talks," the official told Reuters.

Hyundai's exports for April fell 16 percent to 95,359 vehicles, although global sales firmed 10 percent from a year earlier helped by increased production from China and other countries.

In the United States, Hyundai and affiliate Kia Motors continued to underperform a recovering market, hurt by limited manufacturing capacity and rising competition.

Hyundai's April sales inched up 2 percent and Kia's sales remained nearly flat in the U.S. market which rose 9 percent.

The South Korean duo saw their combined U.S. market share drop to 8.6 percent in April from 9.3 percent a year earlier.

But Lee Won-hee, Hyundai's chief financial officer, said last week in an earnings conference call that the automaker was confident it will achieve its annual global sales target this year.

Hyundai Motor shares ended down 1 percent prior to the export and sales figures, underperforming the wider market which fell 0.3 percent.