SEOUL-Hyundai Motor Co. reached a tentative wage deal with its unions, which puts an end to damaging strikes and paves the way for a similar deal at its Kia Motors Corp. affiliate.
"Both the management and workers agreed to a less generous wage package in consideration of worsening business conditions," a union leader said.
The tentative agreement is subject to approval by union members at a vote planned for Friday.
The 48,000 union members of Hyundai Motor's 67,000-person labor force have staged partial strikes on several days since the middle of July, leading to lost production of more than 60,000 cars worth hundreds of millions of dollars.
Workers usually make up some of the losses with extra work later in the year.
Union leaders at Kia are also in wage negotiations with management after declaring a general strike last month.
Hyundai, the world's fifth-largest auto maker when combined with Kia, has been hit by strikes in all but four years of the union's nearly three-decade history, leading to lost production. Any significant work stoppage this year, however, could prove more damaging to Hyundai because it is already grappling with flagging sales in its major markets.
The auto maker posted its 10th consecutive drop in quarterly profit in the second quarter and warned of a tough second half, dimming the outlook for achieving its full-year sales target.
Under the deal, Hyundai will increase workers' basic monthly pay by 58,000 won ($52), give each worker a one-off payment of 3.3 million won and grant bonus and incentive payments worth 3½ times their basic monthly wage. Each worker will also receive 10 Hyundai shares.
Both sides, however, failed to work out differences over the company's plan to introduce a toughened wage-ceiling program, aimed at cutting salaries for employees nearing retirement age. They said they would continue to talk.
South Korea is set to see more strike activity than usual this year, with heavy job cuts underway at the nation's top three shipyards, which are struggling to cope with a protracted industry slump.
Workers at Hyundai Heavy Industries Co., the world's largest shipbuilder by capacity, plan an indefinite strike next week. The union at Samsung Heavy Industries Co. staged a partial strike last month.
Write to In-Soo Nam at In-Soo.Nam@wsj.com