It has high Power, and will always attack the character that has the lowest HP. It is armored, but has low Magic Defense. They also appear in unison with the Gemini enemy in the Omega Ruins. They are excellent sources of AP, yielding 1200 if overkilled.
Iron Giants will drop armor with SOS Regen (which sell for a high price) and/or HP +5% or 10%. They will also drop weapons with Strength or Magic bonuses of +5% or +10%.
Auron's or Kimahri's Piercing weapons do best damage, or the party can use Armor Break. Lulu's elemental magic works well, except for Thunder, which it is resistant to. Summoning Valefor is also efficient, as it is slow enough that Val for can chain half a dozen Sonic Wings before it gets an attack in. One Boost will also charge the Overdrive gauge from empty to full at the cost of nearly 600 damage.