Restructuring Ahead: GM Korea Tightening Its Belt | BusinessKorea

Monday, November 20, 2017

Restructuring Ahead

GM Korea Tightening Its Belt

GM Korea CEO Kaher Kazem is planning to cut costs in various ways.
GM Korea CEO Kaher Kazem is planning to cut costs in various ways.
SEOUL,KOREA
18 September 2017 - 10:45am
Jung Min-hee

It has been found that GM Korea president and CEO Kaher Kazem is planning to cut costs in various ways and his measures are likely to include wage freeze as well as recently stopped TV and radio commercials.

GM Korea is expected to propose wage freeze for several years to unionized employees sooner or later. This is based on the fact that the company’s losses increased to two trillion won or so for the most recent three years and the situation is showing no signs of change this year.

The workers are unlikely to accept it. Wage negotiations between the management and the union, which resumed in 50 or so days on September 13, foundered immediately after the resumption. The union staged a partial strike on September 14 and 15 and is planning to do so again on September 18.

The new president and CEO of GM Korea is regarded as a restructuring expert. Before his recent appointment, he led GM’s withdrawal from India and sale of local manufacturing facilities. He is likely to focus on cost reduction in South Korea in that he emphasized on the importance of the South Korean market during his first speech as the president and CEO of GM Korea.

His last option will be a layoff if the negotiations do not go well. “The company is expected to do its utmost for the time being in order to persuade the union,” said an industry expert, adding, “However, restructuring is likely to follow if its efforts do not work.”

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