Kia Motors, '4th Complete Vehicle' Labor-Management Agreement to Be Settled Within the Year

Among the five completed car manufacturers, only Renault Samsung passed the year.

[Image source=Yonhap News]

[Asia Economy Reporter Kim Ji-hee] Kia Motors has reached a tentative agreement on this year's wage and collective bargaining agreement (wage and collective agreement). With this, four domestic automakers, excluding Renault Samsung Motors, have completed their wage and collective agreements within the year.

Kia announced on the 30th that the union members voted on the tentative agreement for the 2020 wage and collective agreement on the 29th, and the majority approved it. Of the total 29,262 union members, 27,050 participated in the vote. Regarding the wage proposal, 15,856 members, accounting for 58.6% of the voters, and 15,092 members, accounting for 55.8%, voted in favor of the collective agreement, both of which passed. On the same day, the labor and management held a signing ceremony for the wage and collective agreement at the Sohari plant, putting an end to the negotiations that lasted over four months.

Kia, which became the fourth domestic automaker to finalize the wage and collective agreement within the year following Ssangyong Motor, Hyundai Motor, and Korea GM, agreed to freeze the base salary, just like the previous companies. Kia's base salary freeze is the first in 11 years since the 2009 financial crisis. The agreement includes not only the base salary freeze but also a performance bonus of 150%, an encouragement bonus of 1.2 million KRW, and traditional market gift certificates worth 1.5 million KRW.

However, the union compensated for the base salary freeze by achieving results in this year's key issues such as restoring 30 minutes of overtime, extending the retirement age, and future response measures. The restoration of overtime, which was the biggest obstacle in the final negotiations, was agreed upon to restore 25 minutes, the same as Hyundai Motor. The actual overtime hours will be increased by 10 minutes, and the remaining 15 minutes' worth of work will be increased by speeding up the work process to achieve the effect of overtime. Regarding the extension of the retirement age, the existing veteran program, which allows retirees to work as contract workers for up to one year, will be restructured. The implementation time will be advanced, and the scope of eligible job groups will be expanded to increase participation.

Additionally, Kia stands out as the first domestic company to discuss securing COVID-19 vaccines and to invest in reducing labor intensity. Kia plans to invest 300 billion KRW over five years to improve work convenience by supplementing aging facilities.

Of course, the process leading to the agreement after 16 rounds of main negotiations since the August meeting was not smooth. On the 16th of last month, the management proposed a plan similar to that of Hyundai Motor, which had already finalized this year's wage and collective agreement, but the union rejected it. As conflicts continued, production was also disrupted. A partial strike lasted for four weeks starting from the 25th of last month, resulting in production losses of about 47,000 units. Consequently, Kia recorded the dishonorable record of nine consecutive years of strikes since 2011.

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