GM Korea Union to Seek Wage Hike Despite Closure Threat


Unionized workers at ailing GM Korea are widely expected to clash with management over wages and other cost-cutting measures.

GM Korea's union is bent on sticking to the Korean Metal Workers' Union demand of a 5.3-percent wage hike in this year's pay negotiations or W117,418 more per month on average (US$1=W1,067).

It is a heavy gamble. The American carmaker has already threatened to pull out of Korea completely unless the government infuses vast amounts of money and workers accept a pay cut. GM headquarters could simply exclude the Korean subsidiary from production orders for new cars.

GM Korea's cumulative losses over the last four years reached almost W3 trillion, and it decided to shut down the assembly plant in Gunsan by late May because it has been running at less than 20 percent capacity.

It wants staff to accept a wage cap and forfeit bonuses and other incentive payments this year while demanding W1 billion in subsidies from the government if it is to keep its other two factories here open.

Unionized workers may eventually come round, but clearly not without a fight. A GM Korea staffer said, "Cutting personnel and other fixed costs in agreement with the union is a major portion of self-rescue measures. If unionized workers demand a wage hike at this point, GM headquarters could scrap any plans to invest in GM Korea."

GM Korea has submitted a request to the provincial governments of Incheon and South Gyeongsang Province to designate the automaker's Bupyeong and Changwon manufacturing plants as foreign-investment zones eligible for tax breaks and other incentives.

Meanwhile, the Financial Supervisory Service will give financial assistance to subcontractors and other workers in Gunsan and Tongyeong, which were hit hard by the announced closure of the GM plant and the bankruptcy of mid-sized Sungdong Shipbuilding.