SEOUL, July 23 (Yonhap) -- Ssangyong Motor Co., the local unit of Indian sport utility vehicle maker Mahindra & Mahindra, said Wednesday that it has offered to count regular bonuses as part of ordinary wages, a key issue in labor disputes across industries this year.
Sources said the management made the proposal during talks with union representatives the day before.
The move can raise all types of allowances such as overtime pay and severance pay that can have negative influence on the company's bottom line.
Last Thursday, GM Korea Co., the local unit of U.S. automaker General Motors Co., made a similar proposal.
Ssangyong said it plans to give 800 percent bonuses to employees once wage negotiations are concluded.
The carmaker sold 33,235 vehicles in the domestic market in the first half, up 13.5 percent from the year before. Overseas sales were up 2.1 percent to 41,000 units in the same period.
Despite such gains that translate into a 4.1 percent on-year increase in sales to 1.72 trillion won (US$1.68 billion), the carmaker posted net earnings and operating income losses in the period, mainly due to unfavorable exchange rates. Its net earnings were in the red by 3 billion won, while operating losses were 14.3 billion won for the six month period.
In response to the decision, the company's union welcomed it as a step in the right direction. Union leaders, however, said they want the decision to be applied retroactively to late last year, when the country's Supreme Court ruled that all fixed bonuses given to workers uniformly be considered as part of standard wages.
Unionists also said they wanted the company to do more to help workers who have been rehired after being laid off for long periods of time, and to cancel legal action including lawsuits taken against union members accused of causing damages to the company during past labor strife.
Local market watchers see decisions made by GM Korea and Ssangyong as having considerable repercussion for Hyundai Motor Co. and Kia Motors Corp.
Union workers at the country's two largest carmakers have warned they can go on strike if management does not respect the ruling by the top court on the ordinary wage.
Management, on the other hand, rejected such demands by pointing out that bonuses and other fringe benefits given to workers by the carmakers did not fall into the "uniform" clause outlined by the top court.
"Hyundai and Kia did not give bonuses to employees unconditionally, but only to those who have worked for a minimum amount of time, so the practice does not meet the uniform and fixed criteria dictated by the Supreme Court," an official for Hyundai Motor, the world's fifth-largest automotive conglomerate in terms of sales, said.
He also pointed out that the issue of whether bonuses given by Hyundai and Kia can be viewed as part of ordinary wage is still being reviewed in a separate legal battle that is independent of past rulings.
"The company's stance is that any decision on the standard wage issue can only be made after the court rules on it," the official said.
Negotiations at Hyundai and Kia are expected to start in earnest after workers at production plants return from summer vacation in the first week of August.
Industry experts said the wage issue is a sensitive matter for Hyundai and Kia because of their sheer size.
Any move to expand the regular wages could lead to the companies paying 1.4 trillion won ($1.37 billion) extra annually in pay, which can seriously hurt profitability.
A corporate source at GM Korea said the management offered to raise basic pay by 42,346 won and give 8 million won in bonuses if wage negotiations are concluded. The offer on basic pay falls way short of the 159,614 won raise being demanded by the union. More talks are planned for Thursday to iron out differences.
source: yonhapnews
Sources said the management made the proposal during talks with union representatives the day before.
The move can raise all types of allowances such as overtime pay and severance pay that can have negative influence on the company's bottom line.
Last Thursday, GM Korea Co., the local unit of U.S. automaker General Motors Co., made a similar proposal.
Ssangyong said it plans to give 800 percent bonuses to employees once wage negotiations are concluded.
The carmaker sold 33,235 vehicles in the domestic market in the first half, up 13.5 percent from the year before. Overseas sales were up 2.1 percent to 41,000 units in the same period.
Despite such gains that translate into a 4.1 percent on-year increase in sales to 1.72 trillion won (US$1.68 billion), the carmaker posted net earnings and operating income losses in the period, mainly due to unfavorable exchange rates. Its net earnings were in the red by 3 billion won, while operating losses were 14.3 billion won for the six month period.
In response to the decision, the company's union welcomed it as a step in the right direction. Union leaders, however, said they want the decision to be applied retroactively to late last year, when the country's Supreme Court ruled that all fixed bonuses given to workers uniformly be considered as part of standard wages.
Unionists also said they wanted the company to do more to help workers who have been rehired after being laid off for long periods of time, and to cancel legal action including lawsuits taken against union members accused of causing damages to the company during past labor strife.
Local market watchers see decisions made by GM Korea and Ssangyong as having considerable repercussion for Hyundai Motor Co. and Kia Motors Corp.
Union workers at the country's two largest carmakers have warned they can go on strike if management does not respect the ruling by the top court on the ordinary wage.
Management, on the other hand, rejected such demands by pointing out that bonuses and other fringe benefits given to workers by the carmakers did not fall into the "uniform" clause outlined by the top court.
"Hyundai and Kia did not give bonuses to employees unconditionally, but only to those who have worked for a minimum amount of time, so the practice does not meet the uniform and fixed criteria dictated by the Supreme Court," an official for Hyundai Motor, the world's fifth-largest automotive conglomerate in terms of sales, said.
He also pointed out that the issue of whether bonuses given by Hyundai and Kia can be viewed as part of ordinary wage is still being reviewed in a separate legal battle that is independent of past rulings.
"The company's stance is that any decision on the standard wage issue can only be made after the court rules on it," the official said.
Negotiations at Hyundai and Kia are expected to start in earnest after workers at production plants return from summer vacation in the first week of August.
Industry experts said the wage issue is a sensitive matter for Hyundai and Kia because of their sheer size.
Any move to expand the regular wages could lead to the companies paying 1.4 trillion won ($1.37 billion) extra annually in pay, which can seriously hurt profitability.
A corporate source at GM Korea said the management offered to raise basic pay by 42,346 won and give 8 million won in bonuses if wage negotiations are concluded. The offer on basic pay falls way short of the 159,614 won raise being demanded by the union. More talks are planned for Thursday to iron out differences.
source: yonhapnews
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