Workers also raise concerns over the payment of salaries and bonuses accrued while the tyre-maker was under a debt workout programme.

Kumho Tire workers are striking at the tyre-maker's South Korean plants over a proposed new wage system, reports local publication Yonhap English News. At Kumho Tire's three production facilities – Gokseong, Gwangju, and Pyeongtaek – employees staged an eight-hour strike today (17 August). According to the report, Kumho Tire is proposing to implement a "wage peak system" and offering in return a KRW3 million (USD2,540) one-time bonus as well as a one-year extension to employees' retirement age. Yet the unionised workers are demanding an 8.3% hike in basic monthly wages along with performance-based pay for 2014 without any strings attached, while seeking to have the implementation of a "wage peak system" treated as a separate issue. The workers have also raised concerns over the payment of salaries and bonuses accrued while the tyre-maker was under a debt workout programme. Kumho Tire's management has proposed to pay back an undisclosed amount of wages, which the union has termed "insufficient". Kumho Tire's workers staged partial strikes for four days at the South Korean plants last week.
 

Significance: The implementation of a "wage peak system" appears to have taken centre stage at this year's annual wage negotiations. Most South Korean companies pay wages based on seniority, with bonuses tied to the number of hours worked. Under the proposed new "wage peak system", employees could accept a reduced salary for an opportunity to work past the company's current retirement age. The system acts as a job-sharing measure and enhances job security for older employees. Hyundai Motor Group is considering implementing a similar plan at its South Korean units, while domestic automaker Renault Samsung has already gained approval for making such a shift. Kumho Tire carried out a debt-rescheduling programme in 2010, and cut its workers' basic salaries by 10% that year and a further 5% cut during the next three years. The employees last staged strikes in August 2012. The tyre-maker reported a 30.4% year-on-year gain in its net profits for 2014, which appears to have sparked unrest among staff.

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