Kia Motors Union Strikes Again... 'Production Loss Exceeds 30,000 Units'

Three Weeks of Consecutive Strikes... Estimated Production Loss Exceeds 30,000 Units in Two Weeks
Failed to Agree on '30-Minute Overtime' Despite Relay Negotiations the Day Before

Negotiations Stalled After Korean GM's Tentative Agreement Rejected
Additional Strikes Could Cause Snowballing Damage to Partner Companies

A confirmed case of COVID-19 occurred at Kia Motors Gwangmyeong Sohari Plant, leading to a temporary suspension of factory operations. As of midnight on the 17th, Gyeonggi Province health authorities reported 10 confirmed COVID-19 cases related to the Kia Sohari Plant. The photo shows the main gate of the Sohari Plant on that day. / Gwangmyeong - Photo by Kim Hyunmin kimhyun81@

[Asia Economy Reporter Kim Ji-hee] The Kia Motors labor union is going on strike again. Despite sitting down with management for two consecutive days starting from the 7th to discuss remaining issues such as the restoration of 30 minutes of overtime, no agreement was reached. As a result, the union has announced a partial strike for three days starting from the 9th, and the production loss is expected to exceed 30,000 units.

According to Kia Motors on the 9th, the 15th round of main negotiations for this year's wage and collective bargaining agreement (Wage and Collective Agreement) held over two days starting from the 7th at the Sohari Plant in Gwangmyeong, Gyeonggi Province, finally broke down around midnight. During the relay negotiations that continued until the previous day, a tug-of-war over the key issue of restoring overtime continued until the last moment, but no common ground was found.

The management argued that restoring overtime is essentially a demand for a real wage increase and proposed reducing vehicle purchase support for retirees in exchange for accepting this. They also stated that if the union accepts the proposal, additional performance bonuses would be offered. In response, the union declared the breakdown of negotiations and decided to proceed with the planned strike from the 9th to the 11th.

As a result, the partial strikes conducted by the union over this year's wage and collective bargaining disputes have increased to a total of nine days. In addition to refusing special overtime work, the union carried out partial strikes from the 25th to 27th of last month and on the 1st, 2nd, and 4th of this month. During this period, production losses reached 24,000 units. If an additional loss of about 8,000 units occurs due to this partial strike, the total production loss will exceed 30,000 units.

Negotiations for the wage and collective agreement at Korea GM are also showing signs of prolongation. Although talks resumed the day before after the tentative agreement was rejected a week ago, no significant progress was made. Earlier, on the 7th, Kaher Kazem, President of Korea GM, sent a message to all employees expressing concern that "due to production losses and uncertainties arising during negotiations, customer trust and confidence in export markets are gradually being lost," but this was insufficient. Since the tentative agreement was rejected once, the union leadership is expected to take a more cautious stance in future negotiations, raising the possibility that this year's wage and collective bargaining agreement may extend into the next year.

As the strike causes the complete vehicle factories to repeatedly stop and start, the worries of partner companies are deepening. In particular, as the Kia Motors and Korea GM unions have indicated through their respective Central Dispute Countermeasure Committees scheduled for the 11th and 10th that they may escalate to full strikes depending on further negotiations, anxiety is growing. At the end of last year, a three-day partial strike caused Kia Motors to suffer losses of about 40 billion KRW. If the union proceeds with a full strike, the daily loss for Kia Motors’ first-tier suppliers is estimated to exceed 15 billion KRW.

An industry insider said, "Most completed vehicle manufacturers, including Kia Motors, were unable to produce vehicles normally this year due to the impact of the novel coronavirus (COVID-19). In this situation, if the strike prolongs, supply disruptions of popular models such as the Carnival and Sorento are inevitable, and the scale of damage will inevitably expand."

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