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GM Korea workers to strike again

Rumors of GM pulling out of Korea rekindled amid worsening labor-management relations, weak earnings

A striking worker sits outside GM Korea’s second plant in Bupyeong, Incheon. (Yonhap)
A striking worker sits outside GM Korea’s second plant in Bupyeong, Incheon. (Yonhap)
GM Korea’s labor union, which is in a tug-of-war with the management over wage and collective bargaining negotiations, is set to stage another four-day partial strike starting Tuesday, adding to the uncertainties facing the automaker as it struggles with weak performance.

The GM Korea union said Monday that it had decided at a central dispute committee meeting to stage a four-hour partial strike from Tuesday to Friday. It will be the fourth partial strike in this year’s wage negotiation process.

The automaker’s labor and management representatives have held 24 rounds of wage negotiations this year, but failed to find a point of contact. Partial strikes held on eight days over the past two months are estimated to have caused production losses equivalent to about 12,000 vehicles.

The management proposed to extend the wage negotiation cycle to two years this time only and to pay a total of 8 million won ($7,229), including incentives, to each member.

However, the union opposes the extension of the negotiation cycle and demands three things: an increase in the base salary of 123,304 won per month, an annual bonus of 400 percent of ordinary wages plus 6 million won, and the allocation of new cars at the company’s second plant in Bupyeong, Incheon.

Bupyeong Plant No. 2 is scheduled to produce the sporty compact SUV Trax and the Malibu sedan by July 2022. But if these vehicles are discontinued, there are no additional production plans. The management proposed to produce derivatives of a crossover utility vehicle at Bupyeong Plant No. 1, but the union’s position is that the company cannot be trusted unless a specific new car model and allocation volume are confirmed.

The labor union has been boycotting overtime work since Oct. 23 and has been staging partial strikes since Oct. 30. This month, four-hour strikes have been held Nov. 6, 9 and 10.

As the workers continued to refuse to work overtime last month, the nation’s auto industry production fell 4.3 percent on-year, according to the Ministry of Industry. In October, GM Korea’s output fell about 7,000 units year-on-year, accounting for 45.7 percent of the total output decrease.

An official from the Ministry of Industry said, “The overall auto production decreased due to the labor-management conflict in GM Korea and a two-day reduction of working days due to the Chuseok holiday.”

GM Korea was in the red for six consecutive years as of last year. It posted a net loss of 859.3 billion won in 2018, and its loss reached 320.2 billion won last year.

Amid the labor disputes and weak earnings, rumors of GM Korea pulling out of the Korean market are resurfacing. GM Korea CEO Kaher Kazem said in September last year that if the labor-management conflict worsens, GM headquarters will also consider withdrawing from Korea. He added that GM’s refusal to withdraw from the Korean market is possible only if labor-management relations get back to normal. 

By Shin Ji-hye (shinjh@heraldcorp.com)
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