GM Korea union to launch partial strikes over wages

September 19, 2019

Unionized workers at GM Korea Co. will stage partial strikes as wage negotiations stalled, the union said Thursday.

GM Korea’s union will strike for eight hours on Friday and then for six hours per day from Sept. 24-27 and will decide afterwards whether to continue strikes, the union said in a statement.

“We had a meeting with company officials, including President and CEO Kaher Kazem, but the company only said they will make efforts to accept our demands without giving any concrete time frame or details,” union spokesman Dang Seong-geun told Yonhap News Agency over the phone.

The company said it has requested the union “fulfill their commitments and work towards building a strong future.”

The 10,000-member union demanded a 5.7 percent hike in basic monthly salary, 1 1/2 months of wages in performance-based pay and a cash bonus worth 6.5 million won (US$5,400) per worker.

GM Korea rejected the demands, saying it is difficult to accept them due to worsening business environments and the fact that the company is still mired in deficits, among other reasons.

From January to August, GM Korea’s sales fell 6.2 percent to 287,540 vehicles from 306,533 units a year earlier. It posted a net loss of 859 billion won (US$738 million) in 2018 after reporting 3.13 trillion won in accumulated net losses in the 2014-2017 period.

GM Korea workers have already held several rounds of partial and general strikes this year through Sept. 13 for an increase in wages, resulting in over 10,000 vehicles in output losses.

To revive sales, GM plans to introduce 15 new vehicles to the Korean market for the five years through 2023. It launched the U.S.-made Equinox and the upgraded Chevrolet Spark minicar last year.

The Detroit carmaker launched the midsize Colorado pickup truck in Korea late last month and the Traverse SUV early this month. It is also considering adding the full-size Tahoe SUV to the lineup to meet rising demand for SUVs.

The company operates three car assembly plants — two of which are in Incheon, just west of Seoul, and one in Changwon, 400 kilometers south of the capital city. They have a combined output capacity of about 600,000 units.

GM shut down a car assembly plant in Gunsan, 270 km south of Seoul, in May last year due to a low utilization rate.

Also in May last year, GM and the state-run Korea Development Bank (KDB) signed a binding agreement that will permit a combined 7.7 trillion-won lifeline — 6.9 trillion won from GM and 810 billion won from the Korean policy lender — to keep the Korean unit afloat. GM owns a 77 percent stake in GM Korea.

Under the deal, GM is banned from selling any of its stake in GM Korea before 2023 and is required to keep its holding in the unit above 35 percent until 2028.

“Under the agreement, the company promised there will be no forced layoffs by 2028, but it does not have a plan to allocate a new vehicle to the No. 2 plant in Incheon. We believe it will lead to massive layoffs in the coming years. That’s why we lay down our tools,” the union spokesman said.

The company said a decision on the allocation of a new vehicle will be made according to GM’s global product allocation plan and is affected by demands in each market.