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Hyundai Motor workers to go on strike from Wednesday

SEOUL (Yonhap) -- Hyundai Motor Co.'s unionized workers plan to launch a partial strike starting Wednesday after their representatives and the management failed to reach an agreement on a pay raise and other working conditions.

The walkout, which will last through Friday, will mark the fourth straight year of labor disputes at the country's No. 1 automaker.

The two sides reportedly sparred over the introduction of a so-called wage peak system and the scope of ordinary salaries, which determine overtime and severance payments.

The labor union has been seeking a 7.84-percent hike in the base salary and asked that 30 percent of net profit be set aside for bonus payments. It also has been demanding an agreement be signed to guarantee full job security both for regular and irregular workers.

A strike could exacerbate Hyundai Motor's recent slump as the company is already facing tough market conditions at home and abroad. Sales have been falling in the face of fierce competition and the overall downturn in emerging markets.

During the January-August period, Hyundai Motor sold a cumulative 3,143,384 units, down 2.8 percent from a year earlier, according to company data.

Meanwhile, stocks of Hyundai Motor Co. and Kia Motors Corp., South Korea's top two automakers, jumped Tuesday on expectations they will likely benefit from Volkswagen's massive recall and a weak local currency down the road.  

Shares of top automaker Hyundai Motor soared 3.14 percent to close at 164,000 won (US$139.10), and second-ranked Kia Motors also ended up 3.11 percent to 53,000 won. Top auto parts maker Hyundai Mobis also spiked 5.06 percent to close at 218,000 won.

The upswing for the auto shares came amid deepening controversy over German carmaker Volkswagen, which faces billions of dollars in fines and a recall of nearly 500,000 vehicles sold in the United States after it was accused of faking its own diesel engine emission figures.

On Saturday, the U.S. Environmental Protection Agency claimed that Volkswagen has used software that activates emission controls only when the car is going through official testing. Some suspect that the pollution level could be 40 times higher in case the controls were not activated.

 

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