Kia Motors Gwangju Plant 2 Also Confirms May Shutdown... Agrees to Close Until June 8

[Asia Economy Reporter Suyeon Woo] Following Kia Motors' Sohari Plant, the Gwangju 2 Plant has also decided to suspend operations until the 9th of next month. This is to adjust production volumes at plants with a high export ratio amid export disruptions caused by the novel coronavirus disease (COVID-19).

According to industry sources on the 23rd, the labor and management at Kia's Gwangju 2 Plant agreed to halt operations for a total of six days from the 27th to the 29th of this month and from the 6th to the 8th of next month. Considering holidays such as Labor Day and substitute holidays, the plant will be closed for about two weeks from the 27th of this month to the 8th of next month.

During this period, wages will follow existing practices, and the agreement was made so as not to affect bonuses and performance incentives. Previously, Kia's labor and management had been discussing suspending operations at Sohari Plants 1 and 2 and Gwangju 2 Plant, which have high export ratios, from the 23rd to the 29th of this month, but negotiations had been difficult due to wage issues. After reaching an agreement, Kia's labor and management decided to suspend operations at Sohari Plants 1 and 2 this morning, and it appears that the ongoing discussions regarding Gwangju 2 Plant were also concluded.

[Image source=Yonhap News]

In the case of the Sohari Plant, it was agreed to suspend operations from the 27th of this month to May 10th, and additionally from May 22nd to 25th. Considering the holidays including Labor Day and substitute holidays, the operating days of the Sohari Plant next month will be reduced to about half of the usual level.

Sohari Plants 1 and 2 and Gwangju 2 Plant are considered the plants with the highest export ratios among Kia's nine domestic plants. The Sohari Plant produces export volumes of models such as Stinger, K9, Carnival, and Pride, while the Gwangju 2 Plant produces models like Sportage and Soul.

The reason these three plants have decided to suspend operations until next month is due to a sharp decline in demand in overseas markets such as the United States and Europe caused by COVID-19, leading to inventory buildup and an increase in order cancellations. Accordingly, there is speculation that not only the shutdown of these three plants but also additional shutdowns of Hyundai Kia domestic plants with high export ratios may continue beyond next month.

Earlier, Hyundai Motor had suspended operations on Line 2 of Ulsan Plant 5, where the Tucson is produced, for a week starting from the 13th, and during this golden holiday period, Ulsan Plant 4's Porter production line will also have an additional three-day shutdown.

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