S. Korea's Kia Motors posts 1st operating loss in decade

Kia Motors, South Korea's No. 2 carmaker, posted its first operating loss in 10 years due to a one-off factor, a regulatory filing showed Friday.

Kia's operating loss reached 427 billion won (378 million U.S. dollars) in the July-September quarter, marking the first loss since 2007.

Revenue increased 11.1 percent from a year earlier to 14.11 trillion won in the September quarter, but the carmaker logged a net loss of 291.8 billion won.

The turn into the red came as Kia lost a lawsuit, in which a South Korean court ordered the company to provide unpaid ordinary wages to workers.

Kia workers demanded 1.09 trillion won, or about 110 million won per worker, in compensation to include bonuses, lunch allowances and additional overtime allowances in the "ordinary wages."

Ordinary wages are used as a basis of calculating various types of compensation and severance pay.

The court ordered Kia to pay 422.3 billion won, or about one-third of the demanded amount, in compensation.

In preparation for the possible payment of the whole amount claimed by workers, Kia booked around 1 trillion won in loss reserves, leading to the third-quarter loss.

Global car sales by Kia inched up 0.8 percent from a year earlier to 690,028 units in the third quarter. Sales in the domestic market jumped 17.9 percent, but overseas sales declined 15 percent.

(ASIA PACIFIC DAILY)