Auto parts and accessories manufacturer Kia Motors has been a fixture of the American auto industry for nearly a century, but its business is in trouble.
The company is shedding about a third of its workforce and has seen its share price plunge in recent weeks.
The company’s stock is down nearly 50 percent over the past year, and its shares are down by more than 75 percent since March.
Kia has a history of making high-end vehicles for the high-tech auto industry, and it’s unclear what will happen to its current employees and customers.
But Kia’s prospects are bright.
For now, it’s a matter of survival.
Last year, Kia had more than 2,000 employees.
By the end of this year, the company plans to shed more than 3,000 people.
In January, the government announced that Kia was going bankrupt.
“We’ve been down,” said Ken J. Kia, president of the Kia Motor Corp. “We have no business.
We’ve been sold out.
We’re out of money.
Our people are being told we can’t get another job.”
Kias customers are being priced out of the auto business.
In a January interview, Kias chief executive, Ken Kia , said Kia is losing $40 million a year in annual sales because of declining sales of the Lexus brand and other parts.
I don’t know how to explain this to the American public, said Ken Kias executive vice president for operations, Jeff Johnson.
Why can’t they buy Kia?
The problem, he said, is that the American people haven’t gotten used to the way the auto industry operates.
They are used to paying $1,000 or $2,000 a month for parts that they can’t use.
The people who make the cars don’t get paid for making them, said Mr. Johnson.
That’s a huge part of why the American economy is in a bad place.
We’re going to have to make some tough decisions as a company, he added.
There are other automakers who are in the same situation, said Michael J. Stryker, chief financial officer of Kia.
“Kia’s the exception.”
But, he noted, Kies competitors have been in business for decades, so the company is well-equipped to deal with any downturn.
“When a company’s going through a downturn, they’re not going to go out and buy a lot of stuff,” Mr. Styrker said.
It is also not a question of whether Kia will survive.
Every year, about 20,000 workers at Kia go on strike.
But the company’s management is hoping that the crisis will be manageable and the company can come back stronger, said David S. Miller, a managing director at Kias advisory firm.
“That is a reasonable expectation.
We’ll figure it out.”
The bankruptcy filing has sparked a massive rally in Kia stock, which has risen more than 10,000 percent in the past week.
Shares of Kias rose nearly 20 percent after the announcement.
At the same time, Kios shares are falling.
On Wednesday, Kiamco Holdings Inc., a Kia subsidiary, announced that it was filing for bankruptcy protection.
It said that the company was forced to cut costs by eliminating hundreds of jobs, including nearly 3,400 in the United States.
After the bankruptcy filing, Kiacom, the parent company of KIA, said in a statement that it “will continue to operate as a fully viable and growing business in a safe environment.”
Mr. Miller said that it wasn’t immediately clear if the bankruptcy would affect the future of the company.
“Kia said in its filing that it expects to close about 200 of its factories by the end for about $2 billion in debt service.