Partial Strike Extends From Hyundai to Kia Affiliate

Unionized workers at Kia join their counterparts at affiliate Hyundai in staging a 4-hour work stoppage Aug. 21, raising the auto makers’ combined production loss to an estimated 5,500 units valued at 1.09 trillion won ($98 million).

Analysts say the two 4-hour partial strikes against Hyundai held Aug. 20-21 by Korea Metal Workers Union members resulted in 4,200 units of lost production worth 87 billion won ($78 million).

Kia officials tell WardsAuto that production losses from the Aug. 21 work stoppage are estimated at 1,262 vehicles valued at 22.4 billion won ($20 million).

A spokesman says the auto maker hopes an agreement can be reached without further strike action.

“It would be regrettable if the labor union goes on strike at this time of the year, as we believe further discussions could resolve any pending issues,” the spokesman says. “A strike would only damage both the company and the labor union as well as subcontractor companies.”

Contract negotiations between Kia and the KMWU began July 2 but broke down after 10 sessions. Bargaining between the union and both Hyundai and Kia is to resume Aug. 22, but officials with the union’s Hyundai branch don’t anticipate any breakthroughs resulting from the talks.

Analysts note the strike action at Hyundai comes at an especially critical time.

The first of the two days of partial strikes was held one week after Hyundai launched sales of the much-awaited restyled new Avante (Elantra in the U.S. and other markets). An official says during a test drive of the new vehicle with journalists that the auto maker set a 49,500-unit sales target for the rest of the year.

The official notes 6,000 pre-orders already are in hand, and hints of expectations of selling more than 10,000 units per month on an ongoing basis.

Analysts say the strike action could have an immediate impact on the Avante/Elantra, which tops Hyundai’s sales charts year after year. Deliveries last year in Korea totaled 111,290 units, or about 40% of total Hyundai volume in the country, according to WardsAuto data.

Plants 2 and 3 at the Ulsan, Korea, complex produced 360,000 units, of which 248,290 were exported.

Consumer interest has been tempered by economic conditions, but nevertheless there is pent-up demand for the new version in Korea and other markets.

Sales of Korea-built Avante/Elantra vehicles totaled 165,925 units in first-half 2013, with 44,188 sold domestically and 121,737 exported.