Hyundai to share 40% of profits with Korean workers in bonus deal

Hyundai Motor has agreed to pay more than 2 trillion won (USD 1.8 billion) in bonuses to its South Korean workforce after reaching a tentative settlement with its labour union, even as the automaker confronts mounting tariff pressures in the United States and delays in its Georgia plant. Pulse, the English-language service of Maeil Business Newspaper Korea, reported the deal on Wednesday.

The package, concluded after Hyundai’s first strike in seven years, will lift base wages by 100,000 won and award bonuses equal to 450 per cent of base salary, plus a 15.8 million won lump sum and 30 company shares per employee. With an average monthly wage of 4 million won, each of Hyundai’s 63,000 workers is expected to collect about 40 million won in incentives, bringing the total payout to 2.5 trillion won.

The figure accounts for roughly 40 per cent of Hyundai’s consolidated net profit of 6.63 trillion won in the first half of 2025. According to Pulse, last week’s 16-hour strike, which cost an estimated 400 billion won in lost production, accelerated the settlement.

Tariffs and plant delays

The agreement comes as Hyundai navigates uncertain trade conditions in the US, its most important overseas market. Washington and Seoul have discussed cutting tariffs on Korean vehicles from 25 per cent to 15 per cent, but the decision awaits an executive order from US President Donald Trump. Japan has already secured a similar reduction, effective mid-September, leaving Korean exports at a disadvantage.

Hyundai also faces delays at its Georgia plant, which is designed to underpin its US electric vehicle strategy. Pulse reported that the detention of local Korean staff had slowed construction, threatening to disrupt the rollout of battery supplies to American factories.

In addition to pay, union negotiators pressed for job protection. Hyundai agreed to bring production of six-speed transmissions for the Palisade hybrid in-house by 2027, a task currently handled by affiliate Hyundai Transys. Analysts cited by Pulse said that while the move could secure jobs, it also risks raising costs, as labour expenses are higher at Hyundai than at its parts-making subsidiaries.

Union demands also included expansion of in-house electric vehicle component production, despite Hyundai’s official stance that it has no plans to manufacture batteries directly. Observers see the language as a bid to safeguard employment as demand for internal combustion engines wanes.

The settlement further promises to retrain production staff as software specialists, supporting Hyundai’s transition to software-defined vehicles.

The agreement still requires approval from the central labour council in a vote scheduled for 15 September. If rejected, further strikes could follow.

Labour unrest continues elsewhere in the Hyundai Motor Group. Pulse reported that Hyundai Mobis’s union had walked out of talks and planned partial strikes this week, while Hyundai Transys workers at the Seongyeon plant rejected management’s latest offer of a 68,000 won pay increase and 250 per cent bonus plus a 7 million won lump sum.

For Hyundai, the agreement may provide temporary stability as it pursues a delicate transition towards electric and software-driven vehicles. But the backdrop remains uncertain: US tariffs have yet to be resolved, the Georgia plant is behind schedule, and rivals in Japan and the United States are pressing ahead with their own EV strategies.

The outcome of the union vote this weekend will determine whether Hyundai can move forward with its settlement or face renewed stoppages. Either way, the automaker must balance its generous payouts with competitive pressures that are only intensifying in global markets.