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GM Korea to Produce New Malibu Model in Q2 2016
Union Compromise
GM Korea to Produce New Malibu Model in Q2 2016
  • By Jung Min-hee
  • July 20, 2015, 03:30
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The 2016 Malibu makes its debut with Mark Reuss, executive vp of global product development, at the New York auto show on April 1, 2015.
The 2016 Malibu makes its debut with Mark Reuss, executive vp of global product development, at the New York auto show on April 1, 2015.

 

The 2016 Chevrolet Malibu features active grille shutters.
The 2016 Chevrolet Malibu features active grille shutters.

 

The back end of the 2016 Chevrolet Malibu.
The back end of the 2016 Chevrolet Malibu.

 

The interior of the 2016 Chevrolet Malibu.
The interior of the 2016 Chevrolet Malibu.

 

The 2016 Chevrolet Malibu will be offered with a eight-speed or six-speed automatic transmissions.
The 2016 Chevrolet Malibu will be offered with a eight-speed or six-speed automatic transmissions.

 

GM Korea is expected to manufacture the new Malibu mid-size sedan model in Bupyeong Plant in Incheon in the second quarter of next year.

According to industry sources on July 19, GM Korea made an offer to produce the new Malibu model in its plant in Bupyeong in the second quarter next year during the 17th wage negotiations with the labor union on July 16. This is the first time for the company to present the plan to domestically produce and sell the new Malibu.

Its new model was first unveiled at the New York auto show in April. It is a completely different model from the previous one. As the new Malibu has drastically improved designs and a downsized 1.5-liter turbo engine, it has been favorably reviewed online. However, GM Korea has said that it will not introduce the new model in the domestic market for a while, since its existing Malibu model is selling well in the market.

The company decided to manufacture the new Malibu in the domestic market in order to ease concerns over falling production volume in the country. GM Korea recently decided to discontinue the Alpheon large sedan, which has been produced at its plant in Bupyeong, and to sell the Impala in Sept. However, the company will import Impala sedans from the U.S. for Korean consumers. Accordingly, the union asked the company to manufacture the Impala at the domestic plant due to the fact that the domestic production volume will decrease if the model is imported from the U.S., going through a strike process. An official from the industry said, “GM Korea has invested 15 billion won (US$13.09 million) to consolidate its Bupyeong Plants 1 and 2. Considering concerns over domestic production reduction, however, the company has decided to produce the new Malibu at the domestic plant.”

As GM Korea has come up with measures to manufacture the new Malibu sedans in the country, the union is expected to accept the plan to import the Impala. Therefore, the company’s wage negotiations with the union will reach an agreement in the near future.

However, more talks are needed, as the two sides still disagree too much in terms of wages. The union is demanding that the company raise the base monthly wage by 159,900 won (US$139.50), and to give a yearly bonus of five months’ base pay. However, the company has suggested a plan to increase base monthly wages by 49,575 won (US$43.25) and give a yearly bonus of 4 million won (US$3,490). An official in the industry said, “GM Korea incurred a 148.5 billion won [US$129.56 million] operating loss last year, compared with a 1 trillion won [US$872.45 million] operating profit the previous year. Considering its bad business situation, the union is expected to reach a reasonable compromise.”