Kia reaches tentative agreement with union

Kia’s management and labor union hold the first round of wage talks at Kia Autoland in Gwangmyeong, Gyeonggi Province, July 6. (Kia)

Hyundai Motor Group said Wednesday that its affiliate Kia has reached a tentative agreement with its labor union, continuing wage talks without a strike for a third consecutive year.

The management and labor union members sat down for the 16th round of negotiations at Kia Autoland in Gwangmyeong, Gyeonggi Province, Tuesday.

The most pressing item on the agenda was whether Kia would remove a clause in the collective agreement that allows for the hiring of children of workers with more than 25 years of service.

Management had pushed to delete the clause, while the union argued Kia should keep it, warning of a partial strike.

The two, in the end, agreed to make “reasonable” changes to the clause, instead of taking it out as Hyundai did in 2019, according to a Kia official, who declined to disclose details on the matter.

For next year, Kia decided to increase base pay by 111,000 won ($82) and award a bonus equal to 300 percent of the monthly salary plus an extra 8 million won -- the same as Hyundai’s latest wage agreement. Like Hyundai, Kia employees will also receive a bonus equal to one's monthly salary, an extra 2.5 million won and 250,000 won in market vouchers this year.

Kia workers will be given 34 shares in the company, while Hyundai employees are to receive 15 shares of the carmaker. But considering that the value of Hyundai’s shares is around twice as high as those of Kia, the union members from the two firms will be enjoying similar benefits, the company said.

In terms of employment, Kia has decided to hire 300 employees in a move to tackle the youth unemployment issue.

The management and union will cooperate in setting up two manufacturing plants for purpose-built vehicles -- highly customized mobility running on electric powertrains -- in Hwaseong, Gyeonggi Province. The first and second production bases for midsized and large PBVs are expected to start commercial operation by 2025 and 2028, respectively.

The two pledged to expand domestic investment for future mobility business and undertake efforts to stabilize employment within Korea.

The tentative labor deal is subject to a vote by union members on Friday.

By Byun Hye-jin(hyejin2@heraldcorp.com)