Seoul: Kia Corp. and its union have reached a tentative agreement on a wage deal for 2025, as the company faces concerns over U.S. import tariffs. The agreement includes several financial benefits and strategic commitments aimed at maintaining competitiveness.
According to Yonhap News Agency, Kia's 26,000-member union has accepted the company's proposals. These include a 100,000 won (US$71) increase in basic monthly pay, 4 1/2 months of performance-based bonuses, 15.8 million won in cash, 200,000 won in gift certificates per worker, and 53 Kia shares. Additionally, Kia plans to hire 500 engineers for its production lines by the end of next year.
The agreement also outlines Kia's and the union's commitment to transform the automaker's domestic plants into key production facilities for next-generation models, such as purpose-built vehicles. This move is part of Kia's strategy to address the challenges posed by high U.S. tariffs on imported vehicles and to enhance future competitiveness.
Kia and its union have successfully negotiated wage deals without resorting to strikes for the past four years up to 2024. The current tentative agreement will be subject to a union vote on Tuesday.
In a related development, on July 30, Seoul and Washington reached a framework agreement in which the United States agreed to lower "reciprocal" tariffs on Korean products and reduce auto tariffs from 25 percent to 15 percent. This was in exchange for Korea's commitment to invest US$350 billion in the U.S., among other pledges. However, the auto tariffs have yet to be lowered.