Kia Union to Help Mgmt. Ride Out Economic Crisis

The management and union of Kia Motors have agreed to flexibly run production lines by adopting order redistribution and mixed output programs to help the company overcome the global economic crisis, Kia said yesterday.

Under the order redistribution system, assembly lines operating below capacity will produce car brands of other lines having a large backlog of orders. Mixed production involves an assembly line producing more than one brand.

Those two systems had met strong resistance from the union because they raise labor intensity.

Kia CEO Cho Nam-hong and Kim Sang-su, head of the Kia branch of the Korea Metal Workers’ Union, held talks at the company’s Soha-ri plant in Gyeonggi Province Thursday. They adopted a written agreement to this effect.

To better cope with the rapidly changing market situation in the wake of the economic crisis, Kia management and labor agreed to produce more small-size cars, whose demand is rapidly rising, and less of larger and recreational vehicles, whose orders are falling sharply.

To this end, the assembly line at the Soha-ri plant will produce the minivan Carnival and the subcompact Pride at the same time starting the end of the month, and could also assemble the sedan Forte.

“It was an inevitable choice to protect job security,” said Song Woo-chang, head of public relations at the union. “We should continue to negotiate with management because the agreement is limited to the Soha-ri plant.”

The flexible production system is likely to be adopted by other domestic automakers such as Hyundai Motor and GM Daewoo, both of which are also suffering from sluggish sales at home and abroad.

Kia will also likely to introduce a worker transfer system, under which workers at plants running below capacity are transferred to short-handed production lines.

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