SEOUL, Oct. 25 (Korea Bizwire) – South Korea’s leading automaking group Hyundai Motor Group said Tuesday that executives of its 51 affiliates will have their salaries cut by 10 percent starting this month as part of efforts to tide over worsening business conditions at home and abroad.
“Executives of the group’s affiliates are moving to voluntarily cut their salaries,” said a high-ranking official at Hyundai Motor Group told Yonhap News Agency. “As far as I know, it (paycut) will start this month.”
The automaking group’s paycut for executives is the first since the 2008 global financial crisis. Some 1,000 executives may join the move, the official said.
Hyundai Motor Co. and its affiliates are struggling to overcome a protracted sales slump at home and abroad.
In the first nine months of the year, Hyundai Motor and its smaller affiliate Kia Motors Corp. saw their global sales dip 1.8 percent on-year to 5.62 million units, the first contraction since 1998.
Unionized workers of Hyundai Motor downed tools from mid-July to late September, costing the largest South Korean carmaker about 3.1 trillion won (US$2.7 billion) in lost production, according to the company.
Hit by sluggish sales at home and some overseas markets, Hyundai Motor’s operating income-sales ratio dropped to 6.9 percent in 2015, from 8.5 percent in 2014, 9.5 percent in 2013 and 10 percent in 2012.
Hyundai Motor and its affiliate Kia Motors are set to release their third-quarter earnings reports this week, with many analysts expecting poor results from both companies.
The protracted labour disputes, coupled with slackened domestic demand, are expected to have hurt their bottom lines during the third quarter.