Unionized workers at GM Korea Co., the South Korean unit of General Motors Co., voted for a strike over higher salaries and other benefits on July 7. They have shown its strong intention to carry its opinion, though there are rumors that GM Korea will withdraw from the domestic market as part of its global business restructuring. Therefore, all eyes are on how GM Korea’s decision will affect Hyundai Motor and its smaller affiliate Kia Motors in the future.
Out of GM Korea’s 13,449 members of the Korean Metal Workers Union, 11,572 workers participated in the vote that took place from the 6th to 7th and 9,199 of them cast ballots in favor of the general strike, while 2,306 voted against the strike, 1,877 abstained and 87 casted spoilt ballots.
GM Korea’s labor union and management had 13 rounds of wage negotiations until the day before the vote but failed to narrow their different standpoints. The labor union is demanding the company raise workers' monthly basic wages by 154,883 won (US$134.61) and 500 percent of the basic wage, which is 4.25 million won (US$3691.63) in bonuses and other benefits. In particular, it has also asked to change its two-shift 8-9 hour working system to a two-shift 8-8 hour working system and introduce a salary system that guarantees wages even when a plant is closed.
Considering the fact that it was the only domestic automaker posting 631.5 billion (US$548.94 million) in net loss last year and its cumulative deficit reached 2 trillion won (US$1.74 billion) from 2014, however, GM Korea offered an increase of 50,000 won (US$43.46) in basic monthly salary, 4 million won (US$3,477) in performance-based bonus and 5 million won (US$4,346) in incentive per worker.
The union had filed for arbitration by the National Labor Relations Commission on June 30. Under Korean labor law, the union must wait 10 days from the arbitration application date before it can strike. So, the union will secure the right to strike and confirm whether to go on a strike or not after 10 days. Last year, the partial-strike strategy was held on 14 times and cost GM Korea 15,000 units in production losses.