GM and union reach agreement

After the nation’s third-largest automaker GM Korea on Monday became the second local car manufacturer to reach a tentative wage agreement with its labor union, pressure is rising on others to speed up their negotiations.

The Korean unit of U.S. automaker General Motors said that it made the deal with union representatives after the 28th round of wage and collective bargaining negotiations held at the company’s Bupyeong plant in Incheon. The two sides began negotiating in late April.

Union leaders yesterday explained the tentative agreement to its members and will vote on it beginning today. It must be approved by at least half of the union members.

The carmaker agreed to increase employees’ base monthly wage by 63,000 won ($61), give each worker 6.5 million won as a bonus for signing the pact and will also give them an additional 4 million won bonus at the end of the year.

The deal includes counting regular bonuses as part of workers’ base wage, which is the standard for calculating other allowances such as overtime pay and holiday pay. The change will be effective retroactively from March.

The company also promised that the next-generation Chevrolet Cruze compact will be produced at its Gunsan plant to ensure continued operation there. Following GM’s decision to pull its Chevrolet brand from Europe, operations at the Gunsan plant have fallen about 60 percent leaving workers concerned about their job stability.

Ssangyong Motor last week became the first Korean automaker to reach a wage deal for the year. It also agreed to count regular bonuses as part of its employees’ base wage.

Hyundai Motor and Kia Motors, Korea’s two largest automakers under Hyundai Motor Group, are still struggling with their negotiations. While the union is pushing the management to follow the base wage system adopted by GM Korea and Ssangyong, the management has said that it is awaiting a court decision on the matter.

BY joo kyung-don [kjoo@joongang.co.kr]