Kia Pressured by Labor Unions Demanding 'Legal Right to Strike'

[Asia Economy Reporter Ki-min Lee] The Kia labor union, having declared the breakdown of wage and collective bargaining agreement (wage and collective agreement) negotiations, has secured a legal right to strike, intensifying union risks. Korea GM and Renault Samsung, which are resuming negotiations this week, also have clear differences between labor and management, leaving the wage and collective agreement settlement still uncertain.

According to the Kia labor union on the 11th, the Metal Workers' Union Kia Branch conducted a strike action approval vote among all 28,527 union members the day before. Of the 24,710 valid votes cast, 21,090, or 73.9%, approved the strike. Earlier, the Kia labor union declared the breakdown of negotiations with management at the 8th main negotiation session on the 20th of last month and applied for dispute mediation to the Central Labor Relations Commission (CLRC). The CLRC decided to suspend mediation on the 30th of the same month, and with the strike action approved in this vote, the union has secured the legal authority to strike.

The Kia labor union is demanding a basic monthly wage increase of 99,000 KRW (excluding step increases), a 30% performance bonus based on last year's operating profit, extension of retirement age (up to 65 years old), reduction of working hours to 35 hours per week, and new employee recruitment. Additionally, compensation for management performance related to achieving 2 trillion KRW in operating profit in 2019 and last year is also a key demand. The management side has stated that it is difficult to accept demands such as retirement age extension and has not yet presented a separate proposal.

In the industry, while Hyundai Motor, the senior company, secured the right to strike and led to a dispute-free agreement, there is speculation that Kia, which has followed a similar path so far, may forcibly proceed with a strike. Unlike Hyundai Motor, which achieved a wage freeze without dispute last year, Kia conducted a partial strike for four weeks and secured an agreement including a wage freeze and 150% payment of management performance bonuses. During Kia's partial strike period last year, production losses amounted to about 47,000 vehicles.

Korea GM and Renault Samsung labor and management are also facing difficulties in wage and collective agreement negotiations. The Korea GM labor union conducted a union member vote on a tentative wage negotiation agreement on the 26th-27th of last month, but it was rejected as 51.15% of the majority opposed it. The Korea GM labor union held an expanded executive joint meeting the day before and requested the resumption of negotiations, planning to decide on strike guidelines depending on the negotiation results.

An industry official said, "Based on past cases, unlike Hyundai Motor, which secured the right to strike but concluded the wage and collective agreement, other companies like Kia are more likely to actually carry out strikes," adding, "Even if they do not strike, the union's right to strike will be a card that can lead negotiations favorably."

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