Kia and GM managed to put an end to the recent partial strikes by offering unions in South Korea a new wage deal.
The auto sector in South Korea was affected by the recent partial strikes, the first over the past several years. The 12-day partial strike in mid-July caused Kia a production loss of 62,890 cars, while the 23-day partial strikes at GM Korea made the automaker lose 22,620 cars. The new agreement will be signed by Kia’s union members this Friday. Under the tentative wage deal Kia agreed to increase the basic salaries with 5.3%, to offer bonuses equivalent to five months’ salary and to end overnight work starting in March 2013.
Last month GM Korea workers rejected a deal offered by the company. According to the new agreement the automaker will increase the basic wage by Won95,000 per person, offer Won9m in incentives and end overnight work from 2014. It hasn’t been decided yet when the union members will put the new agreement to a vote. The recent strikes have made Kia’s August sales fall 12.4%, while GM Korea’s sales decreased 17%.
“It is positive news for Kia as union members are likely to accept the agreement and the workers will make up for lost production fairly quickly by working overtime,” said Yoon Pil-joong, analyst at Samsung Securities.