Unionized workers at Kia Motors Corp. on Tuesday voted to go on strike over wages, raising concerns of production losses at a time of rising demand for some models.
In the companywide vote, 83 percent of the 26,290 workers who cast a ballot supported a walkout after management refused to accept the union's wage demands in talks held July 23.
Kia's 29,545-member union demanded an increase of 123,526 won (US$105) per person in basic monthly pay for the one-year period that ends in March in 2020, and a bonus package worth 30 percent of the company's operating profit for the 12 months to March 2019.
From the fourth quarter of last year to the first quarter of 2019, Kia posted a combined 1.45 trillion won in operating income.
Instead of agreeing to the union's demands, the company suggested an increase of 38,000 won in basic pay, 150 percent of monthly salary in performance-based pay and a cash bonus of 1.7 million won per person. This counterproposal was rejected by workers.
The company initially asked for a wage freeze, citing challenges ahead such as the ongoing trade war between the United States and China and a possible move by Japan to expand restrictions on exports of key materials to South Korea.
This year's looming strike comes as the automaker is faring relatively well on brisk sport utility vehicle sales that have helped buoy its bottom line.
Kia has strengthened its SUV lineup with competitive models to take advantage of rising market demand. The carmaker's SUV lineup is composed of the flagship Mohave, midsize Sorento, compact Sportage, subcompact Stonic, Soul boxcar and Niro hybrid models.
It added the entry-level Seltos SUV this month and plans to launch the updated Mohave later this year.
In the January-June period, Kia posted a 51 percent on-year jump in net profit to 1.15 trillion won from 764 billion won a year earlier. Operating profit soared 71 percent on-year to 1.13 trillion won on sales of 26.95 trillion won for a 1.2 percent on-year gain over the cited period.
In the first half, Kia sold a total of 1,352,629 vehicles, down 2.4 percent from 1,386,408 units a year ago, achieving 46 percent of its annual sales target of 2.92 million units.