S Korea's Kia Motors union approves wage agreement

SEOUL, Sep 6 (Reuters) Unionised workers at Kia Motors Corp. voted to accept a wage package that includes an average 5.7 percent rise in base salary, South Korea's No. 2 auto maker said on Wednesday.

Kia, an affiliate of the country's top car maker, Hyundai Motor Co., and its union on Friday agreed to the salary increase and other benefits, such as expanded health care coverage.

The deal ended a partial strike that began on July 18.

Kia said in a statement 75.4 percent of 26,654 union members who voted supported the wage agreement and 59.5 percent approved the other benefits. Kia's union has 27,610 members.

Poor labour relations are seen as a big hurdle to Kia and Hyundai's goal of becoming one of the top five carmakers in the world by sales volume by 2010.

Kia blamed the labour dispute for a 31.9 percent fall in August sales compared to a year earlier, led by more than 30 percent drops in both exports and local sales.

In late July, unionised employees at Hyundai returned to work after approving a wage package that included a 5.1 percent rise in basic pay, ending a strike that began on June 26.

Shares in Kia rose 0.32 percent to 15,900 won by 0040 GMT, outpacing a 0.06 percent rise in the wider market.

REUTERS DH PM0704