New Pandemic Phase: Kia Considers Shutting Off the Domestic Taps
South Korea is often held up as an example of how to manage the coronavirus the right way. However, the country’s success in limiting the spread of COVID-19 hasn’t allowed it to escape the economic realities of the pandemic sweeping the world beyond its borders.
As countries around the globe close up shop, demand for the country’s vehicles has fallen precipitously. Kia Motors has a choice to make.
As reported by Reuters, Kia, despite having its manufacturing base located in a country that has largely avoided the disruptions seen elsewhere, might idle production at three assembly plants to bring output in line with reduced overseas demand.
It’s a move that represents a new phase of the pandemic: when countries that once idled production to get their own outbreak under control now have to shut things down to respond to outbreaks elsewhere. With Europe and North America in the grip of the virus and new vehicle sales plummeting to queasy new lows, there’s not much need for new product in overseas inventories.
On Monday, the automaker reportedly told its labor union of the plant shutdown plan, eyeing an idle period lasting from April 23rd to 29th. In classic South Korea fashion, however, the union’s apparently refusing to sign off on the action. There are pay negotiations ongoing.
“Kia Motors is currently reviewing the suspension of some of its plants in Korea in response to declining global demand due to COVID-19,” the automaker said in a statement. “However, a decision has not been made at this time.”
For what it’s worth, Kia Sales in the U.S. shot up 8 percent last year, buoyed by the immediate success of the midsize, U.S.-built Telluride crossover. It’s also worth noting that, even though the U.S. began shutting down businesses and ordering people indoors in the middle of March, Kia managed to outpace last year’s sales tally in the first quarter of 2020.
[Image: Kia Motors]
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