Union up in arms over GM Korea’s lay-off plan

The tension between GM Korea and its labor union is escalating after the automaker decided to run a voluntary retirement program for its employees.

The Korean unit of U.S. auto giant General Motors said on Tuesday that some 5,000 office workers are eligible for the program that runs through Dec. 14.

It is the second time this year that the nation’s third-largest automaker has posted such a program. In June, it offered golden handshakes to office workers above the level of director, and about 130 accepted. The latest round is open to all office workers, it said.

“The program is aimed at strengthening the competitiveness of our organization,” GM Korea said in a statement to employees. It said the second program was launched after the first was met with such a welcome response.

Those who apply will be offered the equivalent of two years’ salary, tuition fees for their children, and a discount voucher worth up to 10 million won ($9,236) to buy a GM vehicle.

Just hours after the announcement was made, its labor union released a statement vowing to fight any attempt to pressure employees into retiring. The union, which represents about 4,000 office workers, falls under the larger umbrella of the more militant Korean Metal Workers’ Union.

The conflict comes as the two sides are already at odds over a decision by GM’s headquarters to discontinue production of the Cruze compact from 2014 at its Gunsan plant in North Jeolla.

The plant, which has an annual production capacity of 260,000 vehicles, makes three models - the Cruze, Lacetti and Orlando - but the former accounts for up to 60 percent of production.

The union claims the move will destabilize the company’s operations, but GM says such scaling back is inevitable to rein in rising costs and ramp up efficiency.

“The voluntary retirement program and discontinuation of the new [Cruze] model shows that GM is treating our Korean unit as just one of a number of assembly lines, not as a core partner for its future plans,” the union said. “It looks like the company is saying it is abandoning its pursuit of sustainable growth.”

Gunsan Mayor Moon Dong-shin met with CEO Sergio Rocha this month to express his concern about the negative impact on the regional economy.

Last year the plant exported 4.4 trillion won worth of products, making up 55 percent of all the city’s exports and 31 percent of those from the province. Combined with its suppliers, the plant employs 11,000 workers, city officials claim. GM Korea said that even though the new Cruze will not be built at the plant, the company will try to maintain a similar level of production by shifting its focus to other models.

By Joo Kyung-don [kjoo@joongang.co.kr]