April 27, 2024

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[THE INVESTOR] Amid GM Korea’s ongoing sales slump, the local unit of the US carmaker informed employees of the situation and requested that the labor union cooperate in finalizing wage talks.

In a letter sent out to the GM Korea employees, the executive committee -- which includes heads of 15 departments, as well as GM Korea CEO James Kim -- stressed the importance of finalizing its wage talks, saying the “outcome can affect GM Korea’s position within the larger General Motors.”

GM Korea Bupyeong Plant

The letter arrives as General Motor’s latest decision to sell its European operation Opel, including the Vauxhall brand in the UK, has raised concern here that the US auto giant may take similar steps in Korea, namely exit the Korean market for good, following its departure from Russia, and planned exit from India and South Africa.

“Opel sales will have both direct and indirect impact on all of GM’s global businesses, including GM Korea, in their production level and new car (plans),” the management said, while adding that GM Korea will continue to play an important role within the global market.

“GM, based on profitability and business potential is reorganizing the business structure. Opel is one example. GM is re-evaluating supply levels and product plans from all of its businesses,” it said, adding that the company cannot fulfill all the demands by the labor union as a result.

GM Korea, ruled out discussing non-wage issues during this year’s wage talk. They include implementing a monthly payment instead of the current hourly basis, offering concrete future plans and improving factory shift hours.

The union workers have requested a 154,833 won (US$134.90) raise in monthly salary, along with a 500 percent bonus increase, among other demands.

The labor union and the management have completed 11 rounds of negotiations, but have not reached an agreement yet, with the labor union indicating the possibility of entering into a strike.

“We are doing our best to reach an agreement with the labor union” a GM Korea spokesperson told The Investor.

For the past three years, GM Korea has had nearly 2 trillion won in losses. GM Korea’s overall sales in June suffered a 21 percent decline from a year earlier due to weak domestic demand and export decline. It sold a total of 43,692 vehicles in June, down from 55,077 units last year.

By Ahn Sung-mi (sahn@heraldcorp.com)