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(LEAD) GM Korea says will reconsider investing in plant amid strikes

All News 14:16 November 06, 2020

(ATTN: CHANGES headline and lead; ADDS details in paras 2-3, 7-10)

SEOUL, Nov. 6 (Yonhap) -- GM Korea Co., the South Korean unit of General Motors Co., said Friday it will reconsider investing in its main plant as its union continues to strike for higher wages.

GM Korea will "reconsider making an investment in the company's No. 2 Bupyeong plant for the production of a next-generation vehicle for exports," the company said in a statement.

The company's statement comes as GM Korea workers on Friday entered another round of partial strikes as the coronavirus pandemic continues to drive up its production losses and affect vehicle sales.

GM Korea's daytime and night-duty workers plan to stage a four-hour strike per person on Friday, Monday and Tuesday, while continuing to refuse to work overtime during the week and on the weekend, union spokesman Roh Hyung-rae said over the phone.

The daytime and night workers already held a partial strike last Friday and Monday at the No. 2 Bupyeong plant in Incheon, just west of Seoul.

"The union will decide Tuesday whether to continue strikes if the company does not make any concessions in this year's wage and collective agreement deal," he said.

This file photo, taken on Feb. 17, 2020, shows GM Korea's Bupyeong plant in Incheon, just west of Seoul. (Yonhap)

GM Korea already suffered over 60,000 vehicles in production losses in the first half due to the virus impact, with output losses involving the industrial action reaching 12,000 units, the company said.

The state-run Korea Development Bank (KDB), the second-biggest shareholder in GM Korea, said an extended industrial action will have an impact on the company's efforts to put its business back on track.

"GM Korea is at a critical juncture of producing more vehicles for exports to the United States and developing a new vehicle. But repetitive strikes continue to weigh on its operations," the KDB said in a statement.

GM owns a 67 percent stake in GM Korea, and the KDB holds a 17 percent stake in the Korean unit.

At stake is the company's proposal to have wage talks every two years, not once a year, to reduce uncertainties ahead, which was rejected by the union.

The company suggested providing 7 million won (US$6,200) in cash bonuses per person if the union accepts the biennial wage talks proposal.

GM Korea, the South Korean unit of General Motors Co., held 21 rounds of negotiations with its union since July, but they have yet to narrow differences over the size of bonuses and future vehicle allocation plans.

The union asked the company to raise the basic pay by 120,000 won per worker and offer four months of salary as a bonus and 6 million won in cash, while demanding a new vehicle production plan at the No. 2 Bupyeong plant after 2022.

The union argues there should be a new vehicle to replace the Trax compact SUV and Malibu midsize sedan currently being produced at the plant.

But the company has balked at the demands, citing the unfavorable business environment caused by the COVID-19 pandemic and steady demand for the models in global markets.

The Detroit carmaker has three Korean plants -- two in Bupyeong and one in Changwon -- whose combined output capacity reaches 630,000 units a year.

This file photo, taken on April 27, 2020, shows Kia Motors' plant in Gwangmyeong, just south of Seoul. (Yonhap)

Other carmakers have already sealed this year's wage deals or have yet to complete them.

Last week, unionized workers at Kia Motors Corp. voted for a possible strike, as they have yet to reach a wage deal with the company for this year.

Kia workers demanded the company increase their monthly basic pay by 120,000 won per person and offer 30 percent of its annual operating profit in performance-based pay.

From January to September, Kia's operating profit plunged 45 percent to 784.85 billion won from 1.42 trillion won in the year-ago period.

The 30,000-strong union also expressed concerns about a possible reduction in workforce due to Hyundai Mobis Co.'s plan to build an auto parts plant for environment friendly vehicles.

Hyundai Mobis is a key affiliate of Hyundai Motor Group, along with Hyundai Motor Co. and Kia Motors.

Renault Samsung Motors Corp., the South Korean unit of Renault S.A., halted negotiations with its union in September as it suspended its sole plant in Busan, 450 kilometers south of Seoul, from Sept. 24 to Oct. 18 to control inventories amid the pandemic.

The Busan plant also stopped operations from Nov. 2-3 for the same reason.

"The company is expected to resume talks with a new union leadership, as the election is under way to select new union leaders this month," a union spokesman said.

Renault Samsung's new union leadership will be launched next month, he said.

Hyundai Motor Co. and SsangYong Motor Co. already sealed this year's wage agreements with their unions.

In September, Hyundai workers accepted the company's proposal that included a freeze in basic pay, a one-off bonus amounting to 1 1/2 months of salary and 1.2 million won in special COVID-19 allowance.

It is the third time Hyundai and its union agreed on a wage freeze, after the 1998 Asian financial crisis and the 2009 global financial crisis. They also reached a wage deal without a strike for the second consecutive year.

SsangYong workers agreed on a wage freeze in April, as they see stable labor-management relations as the key to putting the company back on track amid virus worries.

Mahindra & Mahindra Ltd., which owns a 74.65 percent stake in SsangYong, said in August it will give up its status as the biggest shareholder of SsangYong if it finds a new investor.

This file photo provided by Renault Samsung shows the carmaker's sole plant in Busan, 450 kilometers south of Seoul. (PHOTO NOT FOR SALE) (Yonhap)

kyongae.choi@yna.co.kr
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