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The author is an industrial news reporter at the JoongAng Ilbo.


GM Korea is a struggling company that was on the verge of court receivership only a few months ago. It saved itself after the management and the workers dramatically agreed on a cost-saving plan. Seven months have passed after the company declared normalization of management, but it is still doubtful whether management is normal. In Seoul, Incheon and Changwon in South Gyeongsang, government occupation incidents occurred, and the two sides are still arguing over separating the company’s R&D section. On Dec. 19, the GM Korea chapter of the Korean Confederation of Trade Unions went on an illegal strike, and on the same day, KCTU’s GM Korea Bupyeong irregular employees were arrested for illegally occupying the Incheon Regional Prosecutors Office.

What they need to keep in mind is GM Korea’s reality — it was given a second chance through a national negotiation. The National Assembly, the national government, local governments, Korea Development Bank and major shareholder GM worked hard to reach a compromise. And citizens allowed the government to use a large amount of taxpayers’ money to save GM Korea. The sacrifices allowed GM Korea plants to run again.

The discord over separating the R&D corporation should conclude quickly. GM Korea’s largest shareholder GM pushed for separating the corporation, and it escalated to a lawsuit. After considerable trouble, the second-biggest shareholder, KDB, also agreed. KDB President Lee Dong-gull said on Dec. 18 that separating the corporation would effectively increase GM Korea’s profit.

The only stakeholder opposing management normalization is the labor union. GM Korea union went on strike, claiming that GM would shut additional factories in Korea. However, the agreement of disputes among shareholders made by GM and KDB specifically states that the corporation would be maintained for ten years. In May, GM recognized KDB’s veto on major decisions such as withdrawal of business. Chairman of the Financial Services Commission Choi Jong-gu said on Dec. 19 that there was no reason for the union to continue opposing separation of corporations.

Some GM Korea workers criticized the strike without justification. On the anonymous application “Blind,” a GM Korea worker wrote that strikes that ignore proper procedure cannot be justified, and that GM Korea is not a playground for union executives.

The GM Korea union should stop talking about “10 years” and return to the production line. If productivity is improved, GM has no reason to ever stop their factories in Korea. But while 10 years are guaranteed, it would be a reasonable choice for GM to shut down after 10 years if productivity is bad.

Over the past four years, GM Korea had a 3.13 trillion won ($2.7 billion) net operating loss, and this year, it is expected to suffer 1 trillion won in losses. Domestic sales have declined by 32.3 percent compared to last year. It is not hard to keep factories in Korea open. They need to produce and sell cars.

JoongAng Ilbo, Dec. 21, Page 33
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