Despite High Sales, Kia Plans Layoffs

Kia Motors America said Wednesday that it plans to dismiss 20 of its 225 workers at the company’s Irvine headquarters, even though its U.S. auto sales are booming.

The U.S. arm of Kia Motors Corp. of South Korea took the action to improve the bottom line, spokesman Geno Effler said. Kia Motors America has yet to make money since it began selling in the U.S. in 1994.

“We had a very good 1999, but this is a key year for us to become profitable,” Effler said.

The U.S. operation sold 135,000 cars last year, up more than 62% from the 83,000 sold in 1998, Effler said. Kia has 570 U.S. dealerships.

The dismissals are hitting all departments, including finance, human resources and information technology. No additional layoffs are planned, the company said in a press release.

The Korean parent company, based in Seoul, went into receivership in Korea in July 1997, a casualty of Asia’s economic slump. Rival Hyundai Motor Co. acquired the company in December 1998.

Kia’s fortunes, like those of Korea and other Asian economies, have improved markedly since then. Kia posted a $160-million profit last year, Macedo said, after losing $500 million in 1998.