Last month, GM Korea provided a payback installment plan for the first time in 10 years. That is, the company returned the interest corresponding to 1 percent of the principal to those customers who buy the Spark and pay in installments. In addition, GM Korea came up with zero-interest installments requiring no down payments. This shows how desperately it is trying to tide over the current crisis that has been caused by a decline in exports following the withdrawal of Chevrolet from Europe and the suspension of exports to Russia due to the plummeting ruble.
The company’s domestic performance falls short of expectations, too. During the first three months of this year, GM Korea sold 34,235 cars in Korea, slightly less than a year ago. It recorded 2.5026 trillion won (US$2.3130 billion) in domestic sales last year, while Audi Volkswagen Korea posted 2.6619 trillion won (US$2.4602 billion).
With the situation as it is, the GM Korea labor union is demanding that it be paid a 500 percent bonus even though it has enjoyed a higher increase in base pay. Also, GM Korea included bonuses in the ordinary wage it pays. The company’s selling and administrative expenses increased from 988.3 billion won (US$912.6 million) to 1.1912 trillion won (US$1.1001 billion) between 2013 and 2014.
The headquarters of GM is regarding the labor union as less cooperative than the others. This is why the headquarters is not planning to increase GM Korea’s production volume for the time being. Stephen Jacoby, who is in charge of GM’s international business, officially said in January that the union is not interested in business sustainability based on labor-management cooperation.