South Korean automaker Hyundai is facing fierce competition from Japan and now, a new challenge -- the possibility of its staff going on strike.
Union members are preparing to vote on a potential walkout after they failed to agree with management on wages and employee benefits.
In 2012, Hyundai staff went on strike, costing the company almost $1.5 billion in lost production revenue. Hyundai was forced to end 24-hour staffing of assembly lines and increase average compensation by 27.3 million won ($24,000).
Hyundai is already facing a number of challenges in the modern market. It is easier and cheaper for South Korean firms to manufacture outside of their homeland -- and so the strike is no surprise with the continual weakening of South Korea as a production base, placing jobs in jeopardy. In addition, Japanese models have made a comeback -- eroding consumer demand for the company's vehicles.
Speaking to the BBC, Vivek Vaidya from Frost & Sullivan said the future of the automotive industry lies in hybrid vehicles, a "cleaner, meaner, leaner car." One problem faced by the South Korean firm is the lack of a flagship hybrid model, whereas car makers in Japan and the U.S. have already seized upon the opportunity.
"I'm not saying they can't do it," Vaidya said. "But the credentials aren't there for customers."
This post was originally published on Smartplanet.com