[Reporter’s Notebook] Kia Union on the Brink of Strike, Look at Detroit

[Asia Economy Reporter Kiho Sung] Kia's labor and management, which were on the brink of a strike, have barely reached an agreement on this year's wage and collective bargaining. With this, domestic automakers have all completed this year's wage and collective bargaining without strikes.

The background behind Kia's labor union mentioning a strike in this negotiation lies in the welfare system. Kia has operated a welfare system that gives employees who have worked for more than 25 years and retired a 30% lifetime discount every time they purchase a Kia car, once every two years. However, in this year's negotiation, an agreement was reached to set an upper age limit of 75, apply the discount once every three years, and reduce the discount rate to 25%. Instead, wages were significantly increased. This includes a basic monthly salary increase of 98,000 KRW, a management performance bonus of 200% + 5 million KRW, a goal achievement incentive of 100%, and a quality improvement incentive of 1.5 million KRW. However, the first tentative agreement was rejected by union members who argued that the 'lifetime welfare' was being rolled back.

Watching the negotiation process, one movie came to mind. It is "8 Mile," starring rapper Eminem. 8 Mile shows the bleak reality of Detroit, a declining city in the United States, without any filter. The phrase "Reality is a sewer," famous as an internet meme, symbolizes Detroit and reflects the harsh reality of the declining American automobile industry.

Detroit was once a "city of glory," home to the leading American automakers Ford, GM, and Chrysler. At their peak, these companies provided abundant welfare benefits, including medical insurance not only for retirees but also for their families. However, as companies struggled due to the offensive of imports from Korea, Japan, and Germany, Detroit began to decline.

Detroit's population, which was 950,000 in 2000, dropped to 710,000 by 2010. In 2009, GM filed for bankruptcy protection, and in 2013, the Detroit city government declared bankruptcy. This decline was already predictable. The "RoboCop series," first released in 1987, is set in the bleak near future of Detroit. The aforementioned 8 Mile was released in 2002. Five years later, the United Auto Workers (UAW) union agreed with management to freeze base wages for three years after 2007 and to operate retirees' medical insurance through a separate fund, abandoning the existing welfare system.

This time, Kia's union actions can also be compared to Japan's Toyota. Toyota's union did not raise wages due to concerns over worsening corporate performance. Last year, Toyota's average employee annual salary was about 8.58 million yen (approximately 85 million KRW). Kia's average employee annual salary last year was 101 million KRW, about 20% higher than Toyota's.

There is no law that says South Korea cannot become like Detroit. This is not just Kia union's problem. Now is the time for the union to consider whether a strike is necessary and to think for the people.

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