[Editorial] From bonuses to AI restrictions… Are unions undermining management just to protect their own interests?

The 2026 wage and collective bargaining demands of the Hyundai Motor and Kia unions are directly threatening the global competitiveness of Korea’s automobile industry. The unions at both companies have presented a single “package” of demands, including performance bonuses equal to 30% of the previous year’s net profit, mandatory prior consultation with the union when introducing AI and robots, the adoption of a full monthly salary system, and conditional acceptance of factory reconstruction. This goes beyond a simple demand for better treatment and comes close to an attempt to secure control over the company’s wage system, technology adoption, facility investment, and overall production methods.

Following the Samsung Electronics union’s excessive demands for performance bonuses, the Hyundai Motor and Kia unions are now also drawing core areas of managerial judgment into collective bargaining. The fact that a company has made a profit does not justify demands to distribute it to a specific group at a fixed ratio; such demands undermine the basic principles of corporate finance. The distribution of performance-based compensation should be determined by considering a wide range of factors, including the company’s sustainable growth, shareholder dividends, research and development, entry into new markets, facility investment, and the recruitment of top talent. Demanding that a fixed proportion of net profit be explicitly written into a collective agreement as performance bonuses would erode the company’s capacity for future investment.

Based on Hyundai Motor’s 2025 net profit, a performance bonus of 30% of net profit would exceed 3 trillion won. In boom times, workers would be first in line to share the gains, while in downturns, the burden would be left to the company, shareholders, suppliers, and the market. Once such a provision is codified in a collective agreement, it would inevitably become a massive fixed-cost burden even during economic downturns. This would weaken financial soundness and reduce the company’s ability to invest in the transition to future mobility, including electric vehicles, autonomous driving, and software-defined vehicles.

An even more serious issue is the union’s demand for prior consultation on the introduction of AI and robots. Decisions about what technologies to introduce, when, where, and in what manner fall within a company’s inherent managerial authority. The automobile industry in particular is undergoing simultaneous transformation through electrification, autonomous driving, smart factories, and software conversion. How production facilities should be reorganized, which processes should incorporate AI and robots, and how much should be invested in advanced R&D personnel and technological infrastructure are all core strategic decisions that determine a company’s survival. To make these matters subject to prior consultation with the union is, in effect, little different from saying that the union intends to exercise control over technology investment.

The union frames this as an issue of job security, but in essence it is an attempt to protect its own vested interests by shaking managerial authority. The introduction of AI and robots is an essential condition for improving corporate competitiveness and productivity. Delaying automation and digital transformation may appear in the short term to protect some jobs. In the long term, however, it weakens the company’s growth foundation and ultimately puts even more jobs at risk. Jobs are not preserved by blocking the introduction of new technology; they are sustained when companies survive and grow in the market.

Global competition has already become a race for speed. Tesla has built a highly automated production system centered on its Gigafactories, while latecomers such as China’s BYD are rapidly strengthening both price competitiveness and smart manufacturing capabilities. In this environment, if Hyundai Motor and Kia must consult with unions every time they introduce AI or robots, the speed and flexibility of decision-making will be fatally reduced. If a company’s technological transition is delayed, its competitiveness will weaken, and if competitiveness weakens, the jobs the union seeks to protect will disappear as well.

The demand for a full monthly salary system is problematic in the same way. To require guaranteed wages regardless of production volume, work arrangements, market conditions, or performance is to weaken the link between compensation and results. In the age of automation and electrification, what is needed is not a rigid wage system but a compensation structure that can respond flexibly to change. Expanding fixed costs regardless of productivity increases the company’s cost burden and could ultimately have a negative impact on maintaining the domestic production base.

What is especially concerning about these demands is that they bundle wages, bonuses, working hours, technology adoption, facility investment, and factory reconstruction into a single package. This cannot be seen as rational negotiation over individual issues, but rather as a bargaining strategy aimed at restricting corporate managerial autonomy on all fronts. If unions seek to exert influence not only over wages and working conditions but also over decisions involving technology adoption and facility investment, then this goes beyond the scope of labor-management relations and intrudes into the realm of corporate governance and managerial judgment.

The Center for Free Enterprise (CFE) clearly urges the following: facility investment, the introduction of AI and robots, research and development investment, the recruitment of highly skilled personnel, and changes in production methods must be respected as matters of a company’s inherent managerial authority. If a structure is created in which unions effectively exercise veto power over decisions on technology adoption and innovation investment, it will set a harmful precedent for Korea’s automobile industry as a whole. The distribution of performance-based compensation must be carried out at a reasonable level on the premise of the company’s sustainable growth and future investment capacity.

The government and political circles must also establish clear principles. Autonomous labor-management bargaining should be respected, but it must not be allowed to become a means by which unions delay or control a company’s technological transition and investment decisions through collective agreements. An environment in which companies can innovate and invest freely is the very foundation for creating quality jobs. Korea must not allow the growth base and global competitiveness of its companies to be damaged by unions’ demands for short-term profit distribution and the protection of vested interests.

2026. 5. 7.

Center for Free Enterprise (CFE)

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Original title: [논평] 성과급에 AI제한까지… 노조는 경영권 흔들어 밥그릇만 챙기나

Author: Center for Free Enterprise (CFE)

Date: 2026-05-07

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=comment&pn=1&idx=28883