The Hyundai Motor Company logo is pictured at the New York International Auto Show in Manhattan, New York, U.S., April 13, 2022. REUTERS/Andrew Kelly/

SEOUL, July 12 (Reuters) – Hyundai Motor (005380.KS) said on Tuesday it reached a tentative pay deal with its South Korean union, potentially averting a strike and production losses at its biggest production base.

The tentative agreement came shortly after the South Korean automaker announced plans to build a dedicated electric vehicle (EV) plant in South Korea, which will be its first new car factory in the country since nearly three decades. Read more

“The union and management have managed to reach an interim agreement to avoid a strike for the fourth consecutive year amid risks, such as a prolonged global chip shortage, recession and war in Ukraine,” Hyundai said. Motor in a statement, adding that it would make an effort to strengthen the role of its production facilities in South Korea.

The union, one of the largest in the country with more than 46,000 members, has asked Hyundai to invest in the country to support new businesses, including urban air mobility, purpose-built vehicles and auto parts manufacturing related to electric vehicles. One of the union’s demands, the construction of an electric vehicle manufacturing plant, was included in the tentative agreement. Read more

In May, Hyundai Motor Group, which includes Hyundai Motor and Kia Corp (000270.KS), said it would invest 63 trillion won ($48.1 billion) in South Korea through 2025.

Separately, the South Korean automaker said it will invest more than $10 billion in the United States by 2025, which includes plans to invest $5.5 billion in Georgia to build facilities. electric vehicles and batteries. Read more

Under the agreement reached on Tuesday, Hyundai will raise the workers’ basic monthly salary by 98,000 won ($74.93), give each worker a one-time payment of 4 million won as well as bonuses and incentives, and each worker will also receive 20 Hyundai Motor Shares, according to Hyundai. Overall, Hyundai Motor said each worker’s annual salary is likely to increase by around 9% from a year earlier.

The deal is up for a vote by union members on July 19, according to the union.

Unionized workers at Hyundai Motor in South Korea voted earlier this month for a possible strike over demands for higher wages and anger that management is prioritizing overseas investment.

Hyundai Motor workers last went on strike in 2018.

($1 = 1,309.2200 won)

Reporting by Jihoon Lee and Heekyong Yang, editing by Louise Heavens, Jason Neely and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.