Hyundai Motor Begins Historic Experiment: Moving Toward a Full Monthly Salary System

Hyundai Motor Company and its labor union have agreed to begin formal research and discussions on introducing a full monthly salary system, replacing the hourly wage system that has been in place for nearly 60 years.

During the wage and collective agreement negotiations held on July 8, the two sides reached a consensus to conduct a research study and form a joint labor-management task force to explore the implementation of a full monthly salary system.

The company’s proactive stance on these discussions comes in response to the labor union’s concerns that the future introduction of humanoid robots could lead to a reduction in working hours.

The labor and management plan to benchmark the wage systems of overseas automakers and finalize the specific timing and methods for implementation during next year’s collective bargaining.

The primary driver behind this agreement is the advancement of robotic technology.

At Hyundai Motor’s plants in Savannah, U.S., and Singapore, Boston Dynamics’ quadruped robot, Spot, is already performing patrol and inspection tasks. Furthermore, the humanoid robot Atlas is scheduled to be deployed in manufacturing sites starting at the U.S. plant in 2028.

The union has been demanding an increase in the proportion of fixed wages, fearing that overtime and weekend pay will decrease as robots take over night and weekend shifts.

In response, the company agreed to discuss a full monthly salary system, which would provide workers with a fixed amount every month, rather than the current method of calculating pay by multiplying hourly wages by hours worked.

The strategy is to mitigate resistance from the shop floor and accelerate the transition to automation using artificial intelligence and robots.

The natural decline in the number of production workers is also a factor that eases the company’s burden regarding the introduction of a full monthly salary system.

The number of Hyundai Motor union members has decreased by more than 20 percent over the past four years, and between 1,600 and 2,000 workers are expected to leave the workforce annually due to mandatory retirement by 2030.

As the wage model between Hyundai Motor’s labor and management has historically served as a guideline for the industry, there is speculation that a restructuring of Hyundai’s wage system could bring significant changes to the entire domestic manufacturing sector, including the shipbuilding and steel industries.

As the potential impact grows, Hyundai Motor clarified, "The full monthly salary system is a matter that labor and management are currently discussing for joint research and deliberation, and its implementation has not been finalized."

Reported by Lee Hyeon-yeong | Video by Choi Gang-san | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.