Kia Motors Heads for Partial Strike Friday as Wage Talks Fail

SEOUL, July 5 Asia Pulse - Unionized workers at Kia Motors Corp. (KSE:000270), South Korea's second-largest automaker, will stage a partial strike on Friday after failing to narrow differences with management over salary demands, both sides said Thursday.

Kia's management and labour union met for about two hours earlier in the day to try to end the dispute over wage hikes demanded by the company's 28,000 workers, but no accord was made as the management didn't present a counteroffer. The workers will put down their tools for four hours on Friday as planned.

"Talks ended without any agreement," said Kang Hyun-geun, a company spokesman, adding the company is still undecided on the counteroffer because both sides are far apart.

"The management is likely to hold more negotiations next week, depending on the union's move," Kang said.

Kia's union is demanding an 8.9 per cent raise in basic salary and a special bonus, equivalent to two months' salary.

Union officials have warned that they will decide on future strike actions in addition to Friday's planned partial strike.

Kia workers had originally planned to strike from Tuesday through Friday, but they decided to work on Wednesday and Thursday, citing the two-day dialogue.

Tuesday's eight-hour partial strike cost Kia 28 billion won (US$30 million), or 1,900 vehicles in lost production, according to the company.

For the first quarter of this year, Kia posted a net loss of 30.6 billion won (US$33 million), marking its third consecutive quarterly loss.

The union of Kia, an affiliate of Hyundai Motor Co. (KSE:005380), has gone on strike every year for the past 17 years.

Separately, Hyundai's 44,000-strong union will start annual wage negotiations with management on July 12, said the union spokesman Chang Kyu-ho.

Last year, Hyundai workers staged strikes for nearly one month over higher wages and better working conditions, costing the company 1.64 trillion won in lost production.

Strikes are an annual ritual for Hyundai and Kia. Many analysts cite labour unrest, along with Hyundai Motor Chairman Chung Mong-koo's ongoing embezzlement trial, as key obstacles to the South Korean automobile conglomerate's goal of becoming one of the world's top five automakers by 2010.

Earlier in the day, the Seoul High Court postponed sentencing for Chung until July 10, saying that it needs more time to review the case.

In February, the 69-year-old tycoon was convicted and sentenced to three years in jail for embezzling some US$100 million in company funds and bribing government officials to get business favours.

On June 19, prosecutors requested the appeals court to hand down a six-year jail term for Chung, claiming that three years in prison is too light a sentence for him.

(Yonhap)

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