GM warns on South Korea’s strikes
DETROIT/SEOUL: General Motors Co (GM) has issued its strongest warning yet that persistent industrial unrest eventually could drive it out of South Korea, just two years ater it received a state-backed rescue package to stay in the country.
GM workers have been staging two, fourhour strikes daily since October 30 as they demand an end to a wage freeze put in place ater the 2018 deal that saved the Korean operations from bankruptcy.
The strikes and other industrial action have cost the company 17,000 vehicles in lost production, a number that will hit 20,000 by the end of the week, Steve Kiefer, president of GM’S international operations, told Reuters.
That blow to production was on top of the 60,000 units lost earlier in the year during the coronavirus pandemic, making it likely GM Korea would not turn a profit this year unless it could recapture that output, he added.
“We’re basically being held hostage in the short term by lack of vehicle production,” Kiefer said in a telephone interview. “That’s having a very significant short-term financial impact.”
The industrial actions would “basically make it impossible for us to allocate any further investments or new products to the country of Korea. It’s making the country non-competitive,” he said.
“It is going to have long-term effects if we can’t get this resolved in the coming weeks.”
GM builds as many as 500,000 vehicles a year in South Korea, shipping many to the United States including the popular Chevrolet Trailblazer SUV. The automaker employs about 12,000 people in the country.
GM management wants a two-year labor deal instead of the usual one-year agreement, and have offered union members a signing bonus of 8 million won ($7,230) each for 2020 and 2021.