link to the article: http://www.iol.co.za/business/companies/strong-sales-boost-kia-s-profit-1.1597344#.UmuT8RZBzzJ
operating profit to fall by 13.1 percent. The article did not mention about the reason why the labour went for striking, but it is obviously that there was not enough worker in the company during the strikes. When there's not sufficient worker, less no.of production would be produced and sold to the market, and less profit would be made. Plus, it is shown that domestic sales went down during the strike. And, the strikes only happened during a short period of time (SR), so the supply of workers/labours is considered inelastic .
operating profit to fall by 13.1 percent. The article did not mention about the reason why the labour went for striking, but it is obviously that there was not enough worker in the company during the strikes. When there's not sufficient worker, less no.of production would be produced and sold to the market, and less profit would be made. Plus, it is shown that domestic sales went down during the strike. And, the strikes only happened during a short period of time (SR), so the supply of workers/labours is considered inelastic .
This graph shows elasticity supply of labour in Kia in short run.
- S2 (after shift) became more inelastic as the labour strikes took place.
- It caused the company to lose some profits.
( Cars were still demanding in the market (included overseas, but the producer couldn't provide the appropriate no. of output)
- S2 (after shift) became more inelastic as the labour strikes took place.
- It caused the company to lose some profits.
( Cars were still demanding in the market (included overseas, but the producer couldn't provide the appropriate no. of output)
However, Kia still having strong sales from its international sales including China and Eastern Europe. The net profit for the July to September this year came to 903.3 billion won, up from 829.5 billion won in the same period last year. The net profit went up by 8.9%. And, the company plan to increase its sales by launching a series of new car models and increasing plant operation rate!