Court to rule on Kia wages next week

SEOUL-- A Seoul court is set to issue a ruling on the case involving wages at Kia Motors Corp. next week, a judiciary official said Thursday, a decision that could have far-reaching consequences for South Korean industries.

The Seoul Central District Court will decide next Thursday whether to count "regular" bonuses at the carmaker as part of basic wages, the court spokesman Kim Shin-yoo said over the phone.

In a text message sent to Yonhap News Agency, Kia Motors said, "Carmakers have little room to hire new workers due to worsening business conditions. The court's decision (next week) will have a significant impact on auto parts companies and overall industries."

The country's second-biggest carmaker by sales after Hyundai Motor Co. also said it expects "a wise decision" by the court.

Unionized workers at Kia brought the case to court in late 2011, seeking higher wages and severance pay. The company has balked at the lawsuit, calling their demands "excessive" given declining sales in its major markets.

In the January-July period, Kia sold 149,672 vehicles in China, the world's largest automobile market. This represents a 54 percent plunge from 326,595 units sold in the same period a year before, the company data showed.

Companies in the related industries are closely watching the developments as they too may have to bear higher financial burden for their workers if the court rules in favor of Kia's union.

"The company will immediately have to put aside 3.1 trillion won to retroactively pay higher wages to its workers," said a Kia spokesman. "If the court upholds the union's demands, union workers at Hyundai Motor won't sit idly and they will also ask for an increase in their wages as well."

Payment for such expenditures, if applied to related industries, could exceed 30 trillion won, the spokesman said, citing local reports.

If regular bonuses are included in wages, workers will receive higher wages and more retirement benefits when they leave a company.

On Thursday, Kia shares fell 1.14 percent to 34,800 won, underperforming the broader KOSPI's 0.40 percent gain. Its affiliate Hyundai Motor Co. also shed 2.05 percent to 143,500 won.

Source: Yonhap News Agency

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