Hyundai Motor’s affiliate Kia Motors has announced it will voluntarily award its workers a 50 percent performance bonus, which it originally planned on withholding for failing to meet last year’s production target. Kia’s estimated loss in 2006 is over W100 billion(US$1=W936). Last year, Kia had promised its union to give a 150 percent performance bonus to workers, if they produced 1.19 million automobiles. Kia ended up paying only a 100 percent bonus after workers missed the 2006 production target by 35,000 units. Kia’s unionized workers had reportedly filed no complaint initially, although an identical situation at Hyundai forced unionized workers there to launch partial strikes demanding the full bonus.
What caused Kia’s workers to demand the full payment was after they saw Hyundai Motor’s management cave in to labor demands. Kia’s management voluntarily decided to award the full bonus after learning that its unionized workers were planning to hold a general meeting. After receiving fierce public criticism for being too soft on its militant union, Hyundai Motor’s management agreed to award performance bonuses only if workers make up for production losses incurred last year. But Kia didn’t even include such a clause, getting scared the moment its union showed signs of possibly striking.
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