Korea Aerospace Industries (047810.KS), or KAI, became the first major South Korean defense contractor to reach an early and dispute-free settlement on this year's collective wage and labor negotiations. The two sides agreed to a 5% base pay increase, the same as last year, which is expected to raise wages by an average of about 180,000 won.
KAI's labor and management said Thursday that they held a "Labor Agreement Signing and Co-Prosperity Pact Ceremony" at the company's headquarters in Sacheon, South Gyeongsang Province, with CEO Kim Jong-chul and labor union chairman Kim Seung-gu in attendance, agreeing to cooperate on achieving this year's management targets and the One Team vision. The two sides agreed on a 5% base pay increase and an additional 30 million won in housing stability fund support.
Shortly after taking office, Kim engaged closely with the union through communication and on-site management, expressing his commitment to normalizing operations. He participated directly as chief negotiator in this year's talks, helping to bring the negotiations to an early conclusion. A bonus of 3 million won per union member will be paid to mark the early settlement. Chairman Kim also echoed the CEO's commitment to management normalization, actively proposing improvements to the organization and corporate culture for the company's growth and development, which were accepted.
KAI assessed that the co-prosperity pact has resolved the labor-management tensions seen at the start of CEO Kim's tenure and created conditions for the company to focus on management normalization and strengthening global competitiveness. The company also pledged to work on building a sound corporate culture in which the company and employees grow together, and on sharing profits and guaranteeing rights tied to the achievement of management targets. The union, for its part, agreed to focus on the timely delivery of key models such as the KF-21 and Mir-on, now entering full-scale production, and to actively participate in improving efficiency in production and development sites and in quality management.
In addition, both labor and management plan to cooperate in strengthening the value chain of shared growth with small and medium-sized suppliers and contribute to establishing a stable ecosystem foundation, in response to unstable global supply chains and to enhance the global competitiveness of the domestic aerospace industry. "I am grateful that, even in a difficult business environment, we were able to reach an early and amicable settlement through concession and compromise, opening the path of coexistence," Kim said.
