SEOUL, April 9: In another sign of trouble for South Korea's auto industry, Hyundai Motor Co said on Thursday it needed to cut its payroll by about 30 per cent to remain competitive amid slumping domestic sales.A Hyundai Motor spokesman who asked not to be identified said management was now in talks with union leaders on the subject. ``Given a free-fall in capacity utilisation, about 30 per cent of the company's payroll of 46,000 should be slashed,'' the spokesman said.
Hyundai's domestic sales during the first quarter of this year dropped 50.8 per cent to 64,000 units from a year earlier, while exports rose only 19 per cent to 124,000 units.
``We have yet to decide how and by when the employment reduction would be completed,'' said the spokesman. He said Hyundai Motor had been offering incentives for those who volunteered to retire. Volunteers would be paid several months worth of salary on top of severance payments.
But union officials said it was not true that the company was negotiating with theunion. ``We have never heard from management about any job reduction plans, much less begun to negotiate with them,'' said a leader of the Hyundai Union, Hwang Chi-soo.
The union was planning to hold a rally on Friday to protest management's personnel cutting plans, he said. All of South Korea's carmakers have scrambled to cope with falling domestic sales.
A spokesman for Daewoo Motor Co said the unlisted carmaker had no immediate plans for work force reductions. Instead, Daewoo Motor would cut salaries first, he said, adding company wages had been cut by about 10 per cent.Kia Motors Corp has been even more troubled.
A spokesman for Kia, which is awaiting a court ruling on its receivership application, said it had cut its number of employees to 18,000 from 30,000 since last June and that more work force reductions were likely.
Kia has cut wages by about 50 per cent over the last year,the spokesman said.The three automakers have been operating far below their usual capacity utilisation rate of 80 percent, the company spokesmen said. Hyundai was running at 50 per cent, while Daewoo was at 60 per cent and Kia was at 65 per cent, they said.
Analysts said the three companies would have to slash their work forces even more if domestic sales remained soft.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
