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Refrigerators tell stories, and policies need to listen

Published: 27 Jun. 2025, 00:05

Lee Sang-jai

The author is a deputy director of economic and industry news at the JoongAng Ilbo.

The refrigerator tells a story. A quick glance inside reveals not just a household’s eating habits, but also the rhythms of life, the state of health and the economic pulse of those who live there.

In late 2008, on the western edge of Incheon, in a company apartment complex for GM Korea — then GM Daewoo — employees, the fridge in one worker's home painted a vivid picture. It was filled with the sour scent of kimchi — homemade (napa cabbage kimchi), dongchimi (radish water kimchi) and kkakdugi (cubed radish kimchi), all sent from the countryside. There were three children in the family, but only one carton of milk in the beverage compartment. Times were tough.

The main gate of GM Korea’s Bupyeong plant in Incheon. The company announced cost-cutting measures that include the sale of its company-run service centers and idle land at the Bupyeong site on May 28. [JOONGANG ILBO]

That December, GM Korea’s Bupyeong plant shut down. The global financial crisis had choked car demand. With the factory closed, the worker's monthly income dropped to around 2 million won ($1,479). After paying off loans and taxes, only 1.1 million won remained. To get by, he worked nights as a substitute driver. “But since I still got a salary, I’d only work until midnight,” he said, mindful of those in even more precarious situations.

Last year was a warm one. Orders surged, and with them, overtime and night shifts. This year has been a roller coaster. Tensions spiked in March after the Donald Trump administration implemented a 25 percent tariff on automobiles. A reprieve came in April with a 90-day grace period, and GM Korea was allocated an additional 30,000 vehicles for production. The worker and his coworkers now work six or seven days a week, with two extra hours of overtime during the day shift. After deductions, their take-home pay has reached 6 to 7 million won. Even after the tariff was formally enforced last month, GM Korea’s production in May reached 49,594 units — a 0.4 percent increase from the previous year.

GM Korea CEO Hector Villarreal speaks at its plant in Changwon, South Gyeongsang, on May 16. [YONHAP]

But tensions have returned. The labor union is already preparing for a fight. On June 18 and 19, 88.2 percent of union members voted in favor of collective action, the highest margin ever recorded. Wage negotiations on the 24th ended in deadlock, and union leaders plan to begin a sit-in protest starting June 30.

The immediate cause of the conflict was an announcement last month that GM Korea would sell unused assets at its nine service centers and the Bupyeong plant. But the deeper cause lies with the tariffs. Of the 490,000 vehicles produced by GM Korea last year — mostly gasoline-powered small SUVs like the Trailblazer and Trax — about 420,000 were exported to the United States. Tariffs on price-sensitive vehicles like these are devastating. GM headquarters warned the company could lose $4 to $5 billion globally this year due to the tariffs, with around $2 billion in losses tied to its Korean operations.

Against this backdrop, news of asset sales sparked fears of withdrawal. Some say that interpretation is overstated. The Bupyeong and Changwon plants are among GM’s most efficient manufacturing sites. The company’s research and development division, GM Technical Center Korea, is considered one of the most cost-effective in the global GM network. In exchange for 810 billion won in public funds from the Korea Development Bank — which now owns 17.02 percent of the company — GM agreed to maintain operations in Korea until at least 2028.

Still, uncertainty remains. President Hector Villarreal remarked in recent talks with union leaders that “business is shifting rapidly,” noting GM’s decision to move production from Mexico back to the United States, with inevitable layoffs in Mexico, China and Canada. But not in Korea, he added. His comments seemed to strike a balance between reassurance and subtle pressure.

The company has remained silent about new vehicle production or EV transition plans. Industry watchers suspect GM is using a wait-and-see strategy to extract more government support in negotiations set for 2028. Investment has been minimal. It has been 10 years since GM Korea last hired new employees. Even building maintenance is delayed. “They won’t even repaint the facade,” one employee complained. “If it costs money, they avoid it.”

The government cannot favor a single company just because of tariffs, but meaningful support is still necessary — especially in the form of a business-friendly environment. That includes easing land purchases for factory construction, cutting taxes and bold regulatory reform. If companies are withdrawing not because of poor business but due to red tape and labor strife, that is a different story altogether. Most urgently, the Korea-U.S. tariff negotiations must reach a swift and substantive resolution. Without that, uncertainty will remain.

Chevrolet Trax SUVs waiting for export at a port in South Gyeongsang. [GM KOREA]

The GM Korea worker knows what is at stake. He joined Daewoo Motors in 1989, back when it was a desirable job. Within five years, he had saved enough to buy a modest apartment. But when the Daewoo Group collapsed in 2001, he was among 1,700 laid off. It took him until September 2004 to return, after three years and seven months of failed ventures that left him bankrupt. “That’s when I realized,” he says. “The most important thing is having a job.”

GM Korea directly employs about 10,000 people. Including its third- and fourth-tier suppliers, the number tied to its survival could exceed 200,000.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.