South Korean city approves low-wage carmaking JV with Hyundai Motor

FILE PHOTO: The logo of Hyundai Motor is seen at its dealership in Seoul, South Korea, April 26, 2017. REUTERS/Kim Hong-Ji/File Photo

SEOUL (Reuters) – A council in the South Korean city of Gwangju on Wednesday approved a low-wage carmaking joint venture with Hyundai Motor, an official at the council said.

The automaker and the southwestern city of Gwangju reached a preliminary deal early in December for the joint venture that included an annual wage of 35 million won ($31,345.72) for its employees, which is less than half the average 92 million won that the automaker’s unionized workers earn.

But the deal hit a snag when labor representatives in the city council called for a revision to terms which would suspend annual wage negotiations for the first five years.

Hyundai’s labor union vehemently opposes the joint venture, worrying it would put downward pressure on wages, and eventually take away production and jobs.

The factory is looking to build mini-SUVs starting 2021, with an annual production capacity of 100,000 vehicles.

Reporting by Hyunjoo Jin and Ju-min Park; Editing by Himani Sarkar

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