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Hankook Tire goes on strike

by news dir

Labor and management disagree over wage increase rate
Internal and external bad news due to the increase in shipping rates and raw material prices

[아시아경제 이기민 기자]The labor-management conflict at Hankook Tire, which is having difficulties in wage and collective bargaining (wage agreement), is approaching the worst.

The two major labor unions of Hankook Tire, affiliated with the Federation of Trade Unions and Trade Unions of Korea, held a general strike ceremony at 2 pm on the same day and went on an indefinite strike. Hankook Tire labor and management have been negotiating since last August, but the wage agreement broke down due to differences of opinion on the rate of wage increase.

The union is demanding a 10.6% increase in wages this year, as the wage increase rate has been in the 2-3% range for the past five years and the wage has been frozen last year. On the other hand, the management offered a 5% increase and a bonus of 5 million won.

As the negotiations ran parallel, the union went on a two-hour partial strike from the 16th at the Daejeon and Geumsan factories, and from the 19th, each shift (3 shifts) had a partial strike for 4 hours before leaving work.

Prolonged strikes at Hankook Tire’s Daejeon and Geumsan plants are expected to have a negative impact on 4Q earnings. Before the partial strike, the securities industry predicted that Hankook Tire’s sales in the fourth quarter would increase by 5.44 percent to 1.86 trillion won and operating profit to fall 15.22 percent to 192.8 billion won.

This is because cost increases are inevitable as shipping freight rates and raw material price growth do not stop. The Shanghai Container Freight Index (SCFI), a shipping rate indicator, stood at 4555.21 as of the 19th, more than five times higher than 890.37 in the second quarter of last year (as of April 3).

In addition, the prices of natural rubber, synthetic rubber, and carbon black raw material oil per ton were $1107, $974, and $184, respectively, as of the second quarter of last year, but doubled to $1653, $1988, and $421, respectively, in the second quarter of this year. The price is still high in the third quarter.

Daejeon and Geumsan plants are major production bases that account for 38.7% of Hankook Tire’s total sales (as of last year), so both domestic demand and exports are unavoidable.

An official from Hankook Tire said, “There are differences between labor and management, but we are continuously trying to reach an amicable agreement.”

Reporter Lee Ki-min [email protected]


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