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GM Korea union to vote on strike against R&D entity

All Headlines 09:40 October 11, 2018

SEOUL, Oct. 11 (Yonhap) -- Unionized workers at GM Korea Co., the South Korean unit of General Motors Co., will cast a vote next week on a possible strike to protest against the company's plan to establish a separate R&D corporation, the union said Thursday.

GM Korea plans to hold a shareholders' meeting on Oct. 19 to push forward the plan to integrate design and engineering divisions into a separate R&D-focused entity. Its board of directors gave the go-ahead to the plan last week.

The union views the move as an initial step toward maintaining the new corporation as one of the U.S. carmaker's R&D bases while selling or shutting down its production facilities in Korea in the long term.

"The company's decision to create an R&D entity separately from its manufacturing business, which would require hefty restructuring costs, appears to be a move to sell its car plants," the union said in a statement.

GM Korea workers plan to hold the vote from Monday to Tuesday.

The state-run Korea Development Bank, the second-biggest shareholder in GM Korea after GM, has recently filed an injunction against the shareholders' meeting with a local court.

But GM Korea said it will push ahead with the plan to seek an approval from shareholders next week.

The planned R&D company will carry out design and development work for GM's best-selling midsize sport utility vehicles, the company said.

In May, GM and the KDB signed an agreement to permit a combined 7.7-trillion-won (US$6.7 billion) lifeline -- 6.9 trillion won from GM and 810 billion won from the KDB -- to keep the loss-making Korean unit afloat.

In the same month, the Detroit carmaker shut down one of its four car assembly plants in Korea due to a low utilization rate of 20 percent.

GM holds a 77 percent stake in GM Korea, with the KDB and SAIC Motor Corp. controlling 17 and 6 percent, respectively.

GM Korea union to vote on strike against R&D entity - 1


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