A New Shift Arrangement for Hyundai and Kia Workers

Beginning on March 3, workers at Hyundai and Kia plants have worked under a new shift arrangement that reduces night work as well as overall working hours. For several decades, Hyundai, Kia and other Korean automakers generally operated on a double 10-hour shift system, which consisted of 8 hours of regular work and 2 hours of pseudo-regularized overtime work each shift. The second shift lasted through the night. The new system, however, calls for an 8-hour day shift and a 9-hour afternoon shift. The first shift runs from 6:40 am to 3:20 pm, while the second shift runs from 3:30 pm until 1:10 am.

Among OECD countries, the average working time for Korean workers tops the list. In 2011, the annual work hours for workers in Korea stood at 2,111 on average, a figure 419 hours higher than the 2010 OECD average of 1,692 hours. At Hyundai, workers paid by the hour worked 2,488 hours on average in 2010. 19% of such workers at Hyundai (or 5,151 persons) worked more than 2,700 hours that year.

One of the reasons behind the extremely long working hours is the wage structure used by Korean automakers. Management has kept the basic wage rate so low that workers have to work overtime and even on the weekends and holidays to make a decent living. Roughly 30 percent of compensation is composed by pay for overtime and holiday work. The new shift arrangement was, therefore, expected to reduce the level of total wages accordingly. For this reason there were drawn-out and painful negotiations before the new shift arrangement was introduced.

Management and labor union first agreement to end night work in 2002, but it took ten years from then on before the two sides could reach a final agreement on how this would occur. The union demanded that management adopt the new shift system without lowering wages, intensifying the work load or increasing employment insecurity. Management, on the other hand, wanted to maintain the level of production.

The two parties finally reached an agreement in 2012. They agreed to maintain production volumes at their current level at the time the agreement was concluded. They also agreed to maintain the total wage level. To do so, the union accepted an increase in line speeds by 30 units per hour at all factories (from 402 to 432 units for all of five factories in Ulsan and one plant in Asan) and made minor changes in work schedules to increase working hours. (Regular overtime work for the afternoon shift is actually one hour and twenty minutes.) On the other hand, the management agreed to invest in additional equipment needed to attain the higher level of productivity.

There are, however, several problems with this agreement. The additional investment that Hyundai management announced does not include a budget for hiring new workers. The global automaker has made a phenomenal amount of profits for the past few years. These profits were made possible in principal because of the use of numerous precarious workers on the production line and by squeezing parts suppliers and other service providers. Two in-house subcontracted workers have carried out a high-altitude protest atop a power transmission tower for more than 200 days and the numerous cases in which company has forced suppliers to agree to unfavorable supply contracts by using its advantageous bargaining position are well known.

Considering these facts, the decrease in working hours should be accompanied by an increase in employment, which would enable the redistribution of unfairly accrued profits back into the society. Hyundai has not agreed to do this.

Moreover, the line speed increase without regular overtime work means that in the case of an economic slowdown workers are likely to see their jobs threatened. If the market conditions changes and demand for Hyundai vehicles goes down, management is likely to consider the existing equipment, facilities and workforce as overcapacity. In such a situation, regular workers as well as precarious workers will find their jobs under attack.

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