GM reaches tentative agreement with union

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GM reaches tentative agreement with union

The end of a monthslong dispute with its labor union may be in hand for GM Korea, with the two sides reaching a tentative agreement Wednesday evening regarding working conditions and last year’s wages.

The two sides returned to the negotiation table on March 5, following a breakdown in talks last year. The dispute has stretched on for nine months. Wednesday’s agreement stemmed from union leaders finally agreeing to give up their demands for a higher base wage level and special bonuses.

The 10,000-member union had demanded a 5.7 percent hike in basic monthly salaries, one and a half months in wages in performance-based pay and a cash bonus worth 6.5 million won ($5,300) per worker. Ever since the beginning of the discussions, the Korean unit of the U.S. automaker has rejected those demands, saying the business environment is worsening and the company is still mired in a deficit.

In 2019, GM Korea sold a total of 417,226 vehicles, down 9.9 percent from 462,871 units posted a year earlier.

Instead of providing the wage hikes, GM Korea said it will provide “incentive vouchers” for workers wanting to buy new GM Korea cars. The voucher allows a GM Korea employee to get a discount of between 1 million won and 3 million won per person, depending on the price of the model.

In their provisional agreement, GM Korea and its employees also agreed to continue working together to launch 15 all-new or face-lifted models through 2024 to regain sales targets in the local market.

The two sides said they will hold additional talks to discuss the issue of management’s legal actions against employees who participated in unauthorized strikes last year.

As wage negotiations made virtually no progress for weeks since they began last July, workers staged full and partial strikes over the course of a month, beginning in mid-August. The actions caused talks to break down last October before ultimately restarting in March.

The tentative agreement reached Wednesday will be put to a vote among unionized workers next Monday and Tuesday. More than half of the unionized workforce must agree to the terms for the deal to be finalized.

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