SEOUL - The 17-day strike at Kia Motors Ltd. came to a quiet end Wednesday, June 17, when Kia Motor President Song Byung-Nam and labor union head Ko Jong-Hwan agreed to end the walkout.
Kia management forced union leaders to call off the strike by declaring a lockout and making it clear that the company was ready to call in police to clear out striking workers from the Sohari and Asan Bay, South Korea, plants.
The prospect of a violent confrontation and little chance of winning public support or sympathy forced unionists to return to work.
By Kia's calculation, the strike cost the company over 17,000 units in lost production. Company officials say the export shipment schedule was not affected by the strike.
However, Kia's day-to-day operations and export shipments appear to have been hobbled by the on-again off-again strikes, the drawn-out bankruptcy process, and ongoing problems with suppliers.
Kia's vehicle export shipments for the year fell 20 percent in the first five months of 1998 to 105,653 units, according to tentative figures released by the Korea Automobile Manufacturers Association.
Meanwhile, Hyundai Motor Co.'s shipments for the same period edged up 3.1 percent, while Daewoo Motor Co. Ltd.'s surged 58.7 percent.
On the other hand, Kia continues to do well by supplying key parts to its overseas production bases. Kia managed to increase exports of kit units by 57.6 percent in the January-May period, to 39,640.
The strike began June 1 when Kia Motors' 13,000 union members put down their tools after voting by an overwhelming margin to strike. At the time, the labor union vowed to continue its work stoppage indefinitely until its demands were met.
The main grievance was money.
The bankrupt company had not paid bonuses or production incentives, which together account for some 40 percent of workers' take-home pay.
Kia last paid a bonus in June 1997, a month before the bankruptcy crisis erupted.
In the end, the union got little more than new promises. Under the terms of the agreement, 50 percent of unpaid bonuses and incentive pay are to be funneled into a Kia Motors corporate rescue fund. A claim for the balance will be included in the liquidation plan being drafted for submission to the bankruptcy court on July 30.
Effectively, the workers have to get in line with everyone else with a claim against Kia.
When they will actually collect their money is anyone's guess. Creditors have final authority on whether to honor the unionists' demands.
With no bonuses to fatten their wallets, Kia workers - both blue- and white-collar - have taken a hard hit over the past year. A typical line worker with five years' experience was earning around 30 million won, or about $21,000 at current exchange rates, per year when the company was in its prime.
However, all bonuses and incentive pay have dried up, leaving that same worker with $12,850 a year.
Meanwhile, the pace of inflation is picking up, and could reach into the double digits by the time the year is out.