Kia Motors Corp., South Korea's
second-largest automaker, said Friday its third-quarter net loss
widened from the year before on production losses due to labour
unrest and a decline in sales.
Kia Motors lost 55.1 billion won (US$60.2 million) in the three
months ended Sept. 30, the company said in a statement. Kia posted a
net loss of 43.9 billion won a year earlier.
``We couldn't avoid an operating loss in the third quarter as our
fixed cost burden increased due to production disruptions regarding
wage negotiations, and a decline in sales,'' Kia president Cho
Nam-hong said in a statement.
Sales during the quarter fell 6.7 per cent to 3.27 trillion won
($3.57 billion) from 3.5 trillion won a year earlier.
The company's loss at the operating level _ sales minus the cost
of goods sold _ also widened to 116.5 billion won ($126.3 million)
from 88.6 billion won the year before.
Kia is an affiliate of South Korea's Hyundai Motor Co.
Labor unrest at Kia caused total production losses during the
quarter of 32,704 vehicles valued at 485.1 billion won ($533
million), according to figures provided by Ki Jin-ho, a Hyundai-Kia
Kia workers staged strikes over a total of 10 days during the
quarter in July and August over demands for a wage increase. Kia was
hit by further unrest late in the quarter when contractors disrupted
production in a dispute over wages and other demands.
South Korea's annual Chuseok autumn harvest holiday _ which is
based on the lunar calendar and generally lasts three or four days _
fell in September this year. That was also a factor in weaker
production, Ki said.
Shares in Kia fell 4.8 per cent to close at 10,85 won ($12). Kia
shares have slumped 19 per cent this year.
The company's shares surged 14.9 per cent Thursday after
legendary U.S. investor Warren Buffett mentioned having owned the
shares. It was not clear if he still did.
Hyundai Motor said Thursday its third-quarter net profit rose
44.8 per cent as it suffered no production losses from labor unrest,
as it did in the same quarter in 2006.
Strikes are common at the two automakers. Hyundai's union has
walked off the job for one reason or another every year but one
since it was established in 1987.