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Last Updated: Wednesday, 24 August 2005, 11:52 GMT 12:52 UK
Hyundai workers to go on strike
Hyundai workers demonstrating last year
Hyundai workers have a history of strike action
Workers at Hyundai Motor, the South Korean carmaker, are to strike after the firm resisted calls for an increase in wages and bonus payments.

Unionized staff will stage partial walkouts on Thursday and Friday but have warned of more prolonged action if their demands are not met.

Unions are seeking an 8% rise in basic pay, shorter working hours and more say for staff in managerial decisions.

Hyundai has endured regular strikes, including a five-day walkout last year.

No agreement

Unions representing Hyundai workers said 70% of their 40,000 members had voted for the strike action.

Workers plan to walk off production lines for two hours on Thursday and stage a six-hour stoppage on Friday.

Negotiations broke down due to the company's insincere attitude
Jang Kyu-ho, union spokesman

The strike call came after the two sides failed to reach agreement during a tense round of annual pay negotiations.

Hyundai said it could not accept workers' demands because high oil prices had pushed up its costs while foreign sales had fallen.

Total sales of Hyundai cars fell 10% in July - on a month-by-month basis - with foreign sales down 14%.

Union leaders said they hoped a compromise could be reached, but threatened further disruption if no solution was agreed.

"Negotiations broke down due to the company's insincere attitude," said union spokesman Jang Kyu-ho. "We will step up our action unless our demands are met."

The company did not comment on the planned action.

Limited impact

Analysts believe strained labour relations could hinder Hyundai's ambition to become one of the world's five largest carmakers.

The firm opened a factory in the US earlier this year and could potentially locate more production outside South Korea.

However, analysts said the financial impact of the proposed strikes would be limited.

"Considering the firm's inventory levels, damage to its sales will be minimal," said Kim Hag-ju, from Samsung Securities.

Last year's dispute cost Hyundai 263bn won ($256m, 142m).

A dispute in 1993 was broken up by the government, using special powers designed to protect industries critical to the national economy.

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