GM union starts vote on possible walkout

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GM union starts vote on possible walkout

GM Korea’s labor union on Monday opened a vote on whether to strike over the U.S. headquarters’ plan to establish a separate R&D and design center, claiming it is the first step in a long term plan to completely halt domestic production.

The vote will last for two days.

If the majority of the union agrees to the strike and the National Labor Relations Commission approves, the union has the right to roll out a walkout.

“The separation is a trick to withdraw, restructure, sell or shut down [GM Korea] in the future,” the union said in a statement released Friday.

In July, not long after it pledged to maintain the Korean unit for the next 10 years and inject a combined 7.7 trillion won with the Korean government, GM said it would establish a separate R&D entity and hire 100 more engineers.

The management had scheduled to hold a shareholders’ meeting to approve the plan on Oct. 19.

The union opposed the proposal, requesting a special negotiation session with the management on five separate occasions since September. The company did not respond to the requests, according to the union.

Korea Development Bank, the second biggest shareholder of GM Korea, in September filed for an injunction against the scheduled shareholder’s meeting, claiming the issue needs to be discussed further.

GM Korea said a separate R&D center will help raise the status of the Korean unit among GM’s global operations.

“A more fortified R&D team at GM Korea will help the Korean unit to participate in major global projects more and help more efficient communication with the headquarters,” said an official at GM Korea. “The headquarters has already promised to not withdraw for the next 10 years, but the re-emergence of the withdrawal rumor will only dent sales here.”

GM Korea hasn’t been able to recover its sales since the headquarters closed its Gunsan factory, starting a string of events that nearly ended with the local unit being shut down. In September, GM Korea sold a total of 34,800 units, a 13 percent year-on-year drop. In Korea it sold 7,430 vehicles, a 17.3 percent year-on-year drop.

The new Equinox SUV, which was expected to boost sales, has only seen a disappointing 858 vehicles leave showrooms in the past four months.

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