SEOUL (Reuters) - Workers at General Motors’ (GM.N) South Korean factories plan a partial strike for three days next week, with other carmakers likely to follow suit as annual wage talks stall over working conditions.
It remains to be seen whether automakers’ unions will go on a full strike, but growing labor tension is not good news for investors who are already fretting over the euro zone crisis and slowing growth in China, analysts say.
South Korea’s militant labor unions seem to have been tamed under the current Lee Myung-bak administration, which has cracked down on strikes and limited the number of full-time unionists.
But labor circles are stepping up their voices ahead of presidential elections in December.
The labor union of Hyundai Motor (005380.KS), South Korea’s top automaker, is set to vote next week to join the umbrella Metal Workers Union in staging a partial strike on July 13 and July 20, which if realized, will be Hyundai Motor’s first strike in four years.
Affiliate Kia Motors (000270.KS) also plans to vote on July 11 on strike action.
The most contentious issue is a union demand to end overnight work, but automakers are concerned about a potential loss of production.
GM Korea’s union leadership decided to idle work at several plants for six to eight hours on Tuesday, Thursday and Friday, a union spokesman said of an industrial action that would make GM Korea the first carmaker in South Korea to launch a strike this year.
GM Korea is one of the U.S. automaker’s key Asia production bases, producing a quarter of GM’s Chevrolet cars sold globally, and 98 percent of cars such as the Cruze and the Aveo subcompact sold in Europe.
China is also a major export market for GM Korea’s complete knock-down kits.
Global auto demand is estimated to have grown 7 percent in the first half of this year, helped by a recovery in production by Japanese carmakers. But growth is seen slowing to 4 percent in the second half, as the euro zone crisis spills over to emerging markets and the U.S. economic recovery weakens, Hyundai’s think tank said last month.
Shares in Hyundai closed down 0.85 percent in a flat market .KS11 on Thursday, and have lost 13 percent of their value since hitting a record closing high on April 30.
Reporting by Hyunjoo Jin; Editing by Chris Gallagher