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[Newsmaker] Kia workers go on strike over little progress in wage talks

This file photo, taken April 27, shows Kia Motors' Sohari plant in Gwangmyeong, south of Seoul. (Yonhap)
This file photo, taken April 27, shows Kia Motors' Sohari plant in Gwangmyeong, south of Seoul. (Yonhap)
Unionized workers at Kia Motors Corp. began a partial strike Wednesday to demand higher wages and bonuses amid the COVID-19 pandemic, the union said.

The workers in the morning shift walked away from their production lines at 11:40 a.m. in a four-hour strike while those on the evening shift plan to put down their tools at 8:30 p.m. for another four-hour strike.

The union will stage the partial strikes until Friday, after the company and the union failed to narrow differences over wages and performance-based bonuses in 14 rounds of negotiations, union spokesman Hwang Hyo-dong said over the phone.

"Union leaders will hold a meeting early next week to decide on whether to extend the strikes. We will sit down at a negotiating table with the company if there is an offer this week," he said. 

The partial strikes affect production at Kia's three domestic plants in Gwangmyeong and Hwaseong, both near Seoul, and Gwangju, 330 kilometers south of Seoul.

The 30,000-strong union originally planned to walk out starting Tuesday, but it held the 14th round of negotiations on the same day at the company's request. 

The union demanded the company increase the monthly basic pay by 120,000 won ($104) per person, offer 30 percent of its annual operating profit in performance-based pay, and extend the retirement age from 60 to 65.

But the company proposed 1 1/2 months of merit-based remuneration, 1.2 million won in special COVID-19 allowance, 200,000 won in gift certificates and certain company stocks in lieu of freezing wages for the year, which was rejected by the union.

The union also asked the company to build a module components plant for electric and hydrogen vehicles inside Kia's existing plants, not in plants of parts affiliate Hyundai Mobis Co. It has expressed concerns about a possible reduction in the carmaker's assembly line workers due to Hyundai Mobis' plan to build an auto parts plant for the next-generation models.   

Last month, the union criticized Kia's decision to put aside 1.26 trillion won in provisions for the recall of the faulty Theta II gasoline direct injection (GDi) engine and quality-related expenses, which sharply drove down the company's third-quarter profits.

The company was expected to report an operating profit of 1.3 trillion won in the third quarter, but the reflection of the heavy provisions sharply drove down profits, the union said.

From January to September, Kia's operating profit plunged 45 percent to 784.85 billion won from 1.42 trillion won in the year-ago period due to the impact of the pandemic on production and sales.

Its vehicle sales fell 7.2 percent to 2,129,851 units in the January-October period from 2,294,295 a year ago.

Meanwhile, its bigger affiliate Hyundai Motor Co. in September sealed the wage deal with its union for the year, reaching a wage agreement without a strike for the second consecutive year.

Hyundai's 49,600-member union accepted the company's proposal that included a freeze on basic pay, a one-off bonus amounting to 150 percent of monthly salary, 1.2 million won in special COVID-19 allowance, 10 company shares and 200,000 won in gift certificates.

It is the third time the company and the union agreed on a wage freeze, after the 1998 Asian financial crisis and the 2009 global financial crisis.

Kia has eight plants in Korea -- two in Gwangmyeong, three in Hwaseong and three in Gwangju -- and seven overseas ones -- three in China and one each in the United States, Slovakia, Mexico and India. Their overall capacity is 3.84 million units. (Yonhap)
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