Kumho Tire’s management and union reached a collective agreement on wage after nine months of negotiations. Kumho Tire’s union, an affiliate of the Korean Metal Workers’ Union (KMWU), voted on the tentative wage agreement on 18 and 19 February, with 93.6% of the membership (or 2,738 unionized workers) participating in the vote and 52.45% (1,436 workers) voting in favor of the tentative agreement. Kumho Tire’s union and management began negotiations on 27 May 2015, taking almost nine months to conclude a wage agreement.
For the past nine months, the two parties have locked horns over several issues including adoption of a wage peak system. Management insisted that the system is needed to sustain business growth and improve corporate competiveness, while the union demanded a lump sum bonus of KRW 3 million in return for introducing the system on the grounds that Kumho Tire had already graduated from a debt workout program in 2014 and since then had been making huge profits without duly compensating its employees.
The union carried out a series of partial strikes in August, and staged a full walk-out the same month and through September. The company counteracted with lockouts. In the 3rd quarter of 2015, Kumho Tire marked an operating deficit for the first time in 5 ½ years.
Through the wage agreement, scheduled to be introduced at the end of this year, the two parties have agreed to a pay raise of 2.76%p of basic salary on top of a per-hour increase of KRW 1,180. A ‘Wage Peak System Committee’ will be set up for further consultation. The company will also pay 3 million won to every worker as compensation, while working with the union to establish a reasonable labor-management relationship and improve competitiveness through better performance and productivity.