Kia Motors Labor and Management Face Difficulties in Negotiating Temporary Shutdown of '3 Domestic Plants'

Union Announces "Suspension of Leave Negotiations"

Kia Motors Headquarters in Yangjae-dong, Seoul (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Discussions between Kia Motors labor and management regarding temporary shutdowns at domestic factories are facing difficulties. The company proposed a shutdown of some factories next week in response to the export cliff caused by the spread of the novel coronavirus disease (COVID-19), but the labor union is opposing it due to concerns over wage losses.

According to industry sources on the 17th, the Kia Motors labor union declared a halt to negotiations related to April leave. The atmosphere is such that no agreement has been reached as labor and management have failed to narrow their differences over wage compensation.

The union is opposing the additional shutdown, fearing wage losses. Some union members will have worked less than 50% of the working days this month due to the use of special COVID-19 family care leave, which means they will not receive various allowances, resulting in wage losses. Previously, the union emphasized its stance that it cannot agree to leave that is expected to cause a real wage decline.

Kia Motors labor and management were negotiating a plan to shut down Sohari Plants 1 and 2 and Gwangju Plant 2 from the 23rd to the 29th of this month. Due to the COVID-19 crisis, automobile sales in major markets such as the United States and Europe have virtually stopped, making it inevitable to adjust production of export vehicles. Among the nine domestic Kia Motors factories, the three factories under shutdown discussion have a high proportion of export vehicles such as Pride, Stonic, and Sportage.

Earlier, Hyundai Motor temporarily shut down Ulsan Plant 5, which produces the Tucson, from the 13th to today for the same reason. Donghee Auto's Seosan plant, which produces Kia Morning and Ray under contract, also suspended operations from the 6th to the 13th.

Whether the shutdown will be implemented next week is expected to be finalized by the end of today. Since Hyundai Motor Group currently plans overall production on a weekly basis, a conclusion must be reached within today. For now, both labor and management plan to conduct additional negotiations today to conclude related discussions for next week.

This content was produced with the assistance of AI translation services.