Time running out for GM Korea negotiations

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Time running out for GM Korea negotiations

Negotiations between GM Korea and its labor union got off to a rocky start on Friday, with the first round of discussions breaking down in just 30 minutes.

According to union workers, GM Korea’s management submitted a proposal at 1 p.m. on Friday that the union had already rejected on Tuesday. Friday was the final deadline for the two parties to agree on cost-cutting efforts before the automaker is forced to go into court receivership.

The union workers requested that the management work on a revised version.

The two sides, including GM Korea’s union representative Lim Han-taek and the automaker’s President Kaher Kazem, returned to the negotiating table two and half hours later at 4 p.m.

The second round of negotiations also broke down at 6:30 p.m. No final decision has been reached as of 8 p.m. Friday.

The two sides continue to clash over the future of the remaining 680 employees at the company’s Gunsan plant who have refused voluntary retirement.

GM Korea is proposing that the union workers agree to a 100 billion won ($93.4 million) cut in welfare expenses before discussing the future of the remaining Gunsan plant employees, which includes relocating them to other plants and extensive unpaid leave.

The union workers demand the company guarantees the job security of these workers before discussing a restructuring plan.

The union is requesting that all 680 employees relocate to the automaker’s other plants in Bupyeong, Incheon, and Changwon, South Gyeongsang.

This is a more conciliatory tone from the union. Until recently, it demanded the automaker completely withdraw the plan to shut down the Gunsan plant at the end of May.

The issue first arose in February when GM Korea suddenly announced that it would be shutting down the plant in North Jeolla.

The plant has since suspended operations, and although GM Korea has not detailed an exact plan for the site, it has confirmed that there is no chance it will reopen.

While there was still some optimism on Friday evening that the union and management could finally reach an agreement, if it falls through, the company could face court receivership. The board of directors was scheduled to hold a meeting at 8 p.m. on Friday. As of print time, the meeting had not yet begun.

Next Wednesday, GM Korea will have to pay out 80 billion won worth of wages. In addition, the company has to pay 500 billion won in severance pay to the 2,600 employees that have signed up for retirement on Friday next week. The company also has 1.7 trillion won worth of debt that will mature at the end of this month, pushing the company closer to court receivership.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]

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