Hyundai union votes in favour of strike action Unions at Hyundai Motor and affiliate Kia Motors have voted in favour of strike action, raising the possibility of renewed disruption a year after the South Korean carmakers" most costly labour walkout. The workers at the companies" South Korean factories are among the best paid in the global automotive industry, thanks in part to strong unions at both carmakers, which have been sister companies since Hyundai's takeover of Kia in 1998. Negotiations over the past three months have failed to produce an agreement on pay - the unions have proposed wage increases well above the rate of inflation - and other benefits such as tuition subsidies for workers" children. Following the vote in favour of industrial action, which was announced early on Wednesday morning, the companies and workers have entered a six-day mediation period. That means strike action by the 45,000-strong union could begin next Tuesday, although a Kia union spokesman said it was unlikely to start so soon. "We regret that the union has begun preparations to strike despite the company's proposal to outline its offers in the next round of talks," Hyundai said. There are also many aspects of the union's demands that are hard to accept from the company's point of view. A Kia spokesman said walkouts had been "commonplace in our recent history," and were therefore factored into management plans. The prospect of renewed labour disruption underscores an issue that is viewed by many as a major drawback of investing in the two South Korean carmakers, after a strike last year resulted in $1bn of lost production. This year, an eight-week partial work stoppage as the union refused to do weekend shifts had cost Hyundai more than $900m in production losses. Although both companies produce most of their vehicles outside their home country, the high wages enjoyed by their South Korean workers - many earn about $100,000 a year - are seen as a stubborn drag on profits. The issue is particularly sensitive as the companies pursue a revamped strategy, holding back on capacity expansion to focus on boosting quality and profit margins. "I think this is one of the reasons why shares [in Hyundai and Kia] are trading at a discount to the global automakers," said Angela Hong, an analyst at Nomura. Investors don't exclude the possibility that this will drive Hyundai and Kia into a serious problem. However, Michael Sohn, an analyst at Macquarie, said fears were overdone, adding that the carmakers had made up the lost production from last year's strike with extra labour shifts in the fourth quarter. A strike was likely to consist of a stoppage of several hours a day, rather than a full walkout, he said.