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Gov't calls for talks between GM Korea, labor union

All Headlines 16:31 April 06, 2018

SEOUL, April 6 (Yonhap) -- The South Korean government on Friday urged General Motors' Korean unit to resume negotiations with its labor union to normalize its business as an intensifying labor dispute is complicating the automaker's turnaround plan.

A tug-of-war between GM Korea and its workers has turned more combative after some union leaders took over the office of GM Korea President Kaher Kazem at the company's Bupyeong plant, west of Seoul, for 15 hours from Thursday, demanding the payment of bonuses.

Under the 2017 wage deal, about 16,000 workers at GM Korea received 6 million won (US$5,660) per person in the first round of bonuses in February, and they have been promised a second round of bonuses worth 4.5 million won by Friday.

As the clash unfolded, Paik Un-gyu, minister of trade, industry and energy, visited Bupyeong to meet with Kazem and called for resuming negotiations with unionized workers to discuss the company's restructuring plan.

"To normalize GM Korea's business, the management and labor union should reach an agreement as soon as possible," Paik was quoted as saying in the closed meeting with the CEO. "The government can draw up detailed support measures only after a labor agreement is reached."

Paik Un-gyu (L), South Korean minister of trade, industry and energy, shakes hands with GM Korea President Kaher Kazem during their meeting at Bupyeong plant, west of Seoul, on April 6, 2018. (Yonhap)

Paik said it is important to find consensus among the public to provide financial support for the troubled company and called for the labor union to return to the negotiating table.

"We will continue to monitor the negotiations between the management and labor union and play a mediating role if needed," Paik said. "The government will actively do its part to normalize GM Korea's business at an earlier date."

Tensions have flared between GM Korea and its labor union after the Detroit-based automaker said in February that it would shutter its plant in the southwestern city of Gunsan by the end of May.

The company said it will decide the fate of three other Korean factories in the near future and requested financial support and tax benefits from the Korean government.

Seoul officials have said it will decide on its support measures after a due diligence into GM Korea's financial station. The audit is expected to be completed later this month, a ministry official said.

Amid the restructuring effort, about 2,600 workers opted for voluntary retirement, and GM has proposed a $2.8 billion investment plan for it South Korean unit.

GM has asked the state-owned Korea Development Bank, the Korean unit's main creditor, to co-invest in the company so it can continue making cars in the country.

In a meeting with union leaders on March 27, GM Executive Vice President Barry Engle called on union leaders to accept the company's latest wage offers. If wage negotiations fall through, Engle said the Korean unit could go bankrupt.


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