Hyundai attempting to remodel decade-old wage system

Hyundai motor, the largest South Korean automaker and the fifth biggest globally when conglomerated with Kia Motors, is considering a restructuring of its wage system.

In an attempt to halt increasing wage costs, the company is mulling over a complete renovation of a decade old wage system that is based on seniority rather than merit. With economic growth descending and an aging population, the associated increase in labour costs is corroding the company’s competitive edge.  

Hyundai Chief Executive, Yoon Gap-han, addressing the issue in a letter to workers seen by Reuters, said: "Our wages have reached a critical limit as a manufacturing company. I am concerned that Hyundai may face a situation where it is impossible to produce vehicles at domestic factories anymore.”