Kia, GM Korea Reach Tentative Agreements With Unions

Kia and GM Korea reach tentative agreements with their labor unions, with the offer on the table a little better for Kia workers than the one agreed to at GM Korea.

Kia workers will hold a ratification vote Friday. The GM Korea union has not scheduled what will be a second ratification vote. The first tentative deal was reached Aug. 15 but was rejected by 81.3% of union workers two days later.

The tentative contracts are the result of negotiations going back to May.

The Kia deal was reached in its 30th collective bargaining meeting in sessions that began May 22. GM Korea held 31 meetings with its union after talks began May 13.

The Kia agreement is similar to the one ratified Aug. 31 by the Hyundai workers’ union. A Kia spokesman tells WardsAuto the tentative accord includes elimination of the current two 10-hour work shifts. It replaces it with a daily formula of one shift of eight hours and one shift of nine hours beginning March 4, 2013.

The Kia work-shift agreement is equivalent to that which was stipulated in the Hyundai contract. “The labor union has also agreed to increase productivity, but we are not releasing specifics at this time,” the Kia spokesman says.

Kia pledges to invest 303.6 billion won ($270 million) in facility upgrades to “improve worker convenience and productivity,” the spokesman says.

The salary and bonuses are the same in total to those won by its Hyundai affiliate, but the bonus structure is a little different.

The base salary is increased by 98,000 won ($86.50) per month, with bonuses that total 500% of the worker’s monthly pay, plus 9.6 million won ($8,500).

The bonuses include a signing bonus of 350% of monthly pay plus 6 million won ($5,300) and a special bonus for increasing productivity and sales of 150% of monthly wages plus 3.6 million won ($3,200).

Additionally, the Kia union tentatively agrees to raise the worker retirement age from 59 to 60.

“We held our first negotiating session on May 22 and have met 30 times,” the spokesman says. “During that period there were 33 days of partial strikes that cost Kia lost production of 62,890 vehicles, valued at 1.03 trillion won ($919.4 million).”

GM Korea and its labor union reached their tentative agreement Wednesday.

The pact calls for a wage increase of 95,000 won ($84), a lump-sum signing bonus of 3 million won ($2,700) to be paid after ratification and a 6 million won ($5,400) performance bonus to be paid at the end of the year.

The two sides agree to end night-shift work, but the language for the new formula has not been released.

“We have agreed on a 2-shift system that does not include night work,” a GM Korea spokesman says. “We will test-run the new system in 2013 and have it fully implemented by 2014.”

GM Korea now runs two 10-hour shifts, which include two hours of overtime. The day shift starts at 8 a.m. and runs until 7 p.m. The night shift takes over immediately and works until 6 a.m.

The GM Korea union canceled a 6-hour partial strike that had been planned for today. However, workers put down their tools on Monday, Tuesday and Wednesday for four hours on each shift.

As of Wednesday, GM Korea had lost an even 24,000 units of production since the partial strikes began in July. Of the total, 11,000 units have been lost since the two sides returned to the table this month.