Kia Motors Corp told its labor union in South Korea that it wants to suspend operations at three of its domestic factories as the COVID-19 outbreak weighs on exports to Europe and the US, a union official said yesterday.
The union has not yet decided whether to accept the plan — under which operations would be suspended from Thursday next week to April 29 — because negotiations over pay are ongoing, the official said.
“Kia Motors is currently reviewing the suspension of some of its plants in Korea in response to declining global demand due to COVID-19. However, a decision has not been made at this time,” Kia Motors said in a statement.
Kia Motors’ share price fell 4.84 percent and that of affiliate Hyundai Motor Co declined 1.91 percent in a wider market that was 1.88 percent lower at the close of trade yesterday.
Hyundai Motor halted a line producing its Tucson sport utility vehicle in the southeastern city of Ulsan from yesterday to Friday
Hyundai and Kia Motors have suspended operations at most of their factories outside South Korea and China as the coronavirus spreads fast beyond Asia.
South Korea’s exports for the first 10 days of April plunged 18.6 percent from the same period a year earlier, far below the 20.8 percent jump from March 1 to March 10.
Shipments of vehicles and vehicle components during the period tumbled 7.1 percent and 31.8 percent respectively, government data showed.
South Korean President Moon Jae-in has vowed to focus on saving jobs and protecting the economy amid worries about possible mass unemployment in the wake of the pandemic.
Moon said during a meeting with presidential advisers yesterday that South Korea’s economy cannot help being affected by the coronavirus outbreak.
The latest progress in South Korea’s anti-virus quarantine campaign is easing the outbreak’s economic impact, but the biggest concern is an employment issue, because the number of people seeking unemployment benefits is rising sharply, he said.
“It may be the beginning of pains... We must work out special countermeasures,” Moon said.
Additional reporting by AP
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