March 12, 2019 / 10:19 PM / a year ago

UPDATE 1-Labour shortage prompts strike action in Hungary's car industry

(Adds details to reflect that the Wescast strike has ended)

BUDAPEST, March 12 (Reuters) - Workers at South Korea’s Hankook Tire Co Ltd plant in Hungary went on strike on Tuesday, demanding an 18 percent wage increase, the VDSZ trade union said, as a labour shortage puts pressure on the car industry.

The industry accounts for nearly a third of Hungary’s manufacturing output and is a major driver of exports and economic growth but wages are rising sharply as companies find it hard to find skilled workers.

Hankook employs around 3,300 people at its factory making tyres for cars and smaller trucks near the central Hungarian town of Dunaujvaros. The strike began at 1300 GMT after workers rejected management’s offer last week of a 13.6 percent wage increase. They also want bigger bonuses and the strike would last indefinitely, VDSZ said.

Workers at the Hungarian operations of Canada-based exhaust parts producer Wescast also began a strike on Tuesday in the city of Oroszlany, near Budapest - where the company employs 1,200 people. The workers at Wescast, which is owned by China’s Sichuan Bohong Industry, demanded higher pay.

The strike ended later on Tuesday, as the workers agreed with the company on a wage increase, the Vasas trade union said on its website. No other details were immediately available.

The news website quoted Vasas Deputy President Zoltan Laszlo as saying that the workers will receive a pay rise of 200 forints (71 U.S. cents) per hour, three times the company’s original offer.

A strike in January by workers at Audi AG paralysed the German car maker’s factory in Gyor, Western Hungary, and also its main plant in Ingolstadt, Germany, for days. Workers eventually secured an 18 percent wage increase.

Hungary’s economy is growing by almost 5 percent annually and its unemployment rate is at 3.7 percent, a near record low. ($1 = 278.8900 forints) (Reporting by Sandor Peto and Gergely Szakacs in Budapest Editing by Susan Fenton and Matthew Lewis)

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