SEOUL, Sept. 28 (UPI) -- COVID-19 is having such a profound effect on South Korea's economy that even labor union members are agreeing to freeze wages at major conglomerates.
Hyundai Motor Co. said Friday that the automaker's management and labor union had agreed to freeze wages for the first time in 11 years. Later in the day, some 52 percent of its union members voted in favor of the decision.
It marks the third time that Hyundai unionists have accepted a wage freeze after the Asian Financial Crisis really took root in 1998.
"We did our best for job security and proper salaries of employees amid the worst situation caused by COVID-19," Hyundai's trade union chief, Lee Sang-soo, said in a statement.
SK Securities analyst Kwon Soon-woo said Hyundai's management-labor agreement would likely trickle down to the wage contracts at Kia Motors, an affiliate of Hyundai.
"The chances are that Kia Motors would come up with a similar wage deal as Hyundai," Kwon said.
The management and labor of the country's largest steelmaker, POSCO, also agreed to freeze the wages in late August for the first time in five years. Nearly 94 percent of unionists voted for that deal.
However, other unionized workers -- like those at General Motors Korea -- are threatening to launch a strike.
GM Korea's union is asking for more than $17,000 in bonuses and incentives per worker, as well as a roughly $100 raise to monthly salaries. The company's management is so far declining the request, citing recent losses.
GM Korea has been reporting operating losses over the past six consecutive years, totaling more than $2.5 billion to date.
"The strong stance of GM Korea unionists can make things worse. In this climate, the government would not be able to offer any support at a time when GM Korea is feared to leave the country," said Sung Tae-yoon, a professor at Yonsei University.
Korean media outlets have repeatedly reported on concerns that GM Korea might withdraw due over continued losses and ongoing disputes with its trade union.