Back To Top

Kia union votes to accept wage freeze amid pandemic

Kia Motors' Sohari plant in Gwangmyeong, south of Seoul (Yonhap)
Kia Motors' Sohari plant in Gwangmyeong, south of Seoul (Yonhap)

Unionized workers at Kia Motors have voted to accept a new annual wage deal with management, the company said Tuesday.

In a vote by 27,050 members of the labor union, 58.6 percent, or 15,856, agreed to the company's proposals, including 1 1/2 months of merit-based remuneration, 1.2 million won ($1,080) in special COVID-19 allowance and 1.5 million won in gift certificates per person, instead of freezing basic pay, according to a company official.

The company also agreed to restore the 25-minute extra work system following an eight-hour shift per worker.

It is the first time since 2009, when the global economic crisis was weighing on vehicle sales, that Kia workers have tentatively agreed to a freeze in their basic pay.

The deal comes after Kia workers held partial strikes at the carmaker's domestic plants for 14 working days in the past four weeks, resulting in production losses of 47,000 vehicles.

From January to November, the maker of the K5 sedan and the Sorento SUV sold 2.39 million vehicles, down 6.1 percent from 2.55 million units a year earlier, due to weak demand amid the pandemic.

Kia has eight plants in Korea -- two in Gwangmyeong, three in Hwaseong and three in Gwangju -- and seven overseas ones -- three in China and one each in the United States, Slovakia, Mexico and India. Their overall capacity is 3.84 million units.

Meanwhile, its bigger affiliate Hyundai Motor in September reached a wage agreement without a strike for the second consecutive year.

Hyundai's 49,600-member union accepted the company's proposal that included a freeze on basic pay, a one-off bonus amounting to

150 percent of monthly salary, 1.2 million won in special COVID-19 allowance, 10 company shares and 200,000 won in gift certificates.

It was the third time the company and the union agreed on a wage freeze, after the 1998 Asian financial crisis and the 2009 global financial crisis. (Yonhap)