The management and labor of GM Korea at a fateful crossroads met each other for the first time after the closure of Gunsan Plant but left the negotiation table after checking differences in their positions only.
Both sides had the third collective bargaining negotiation for 2018 at Bupyeong Plant on February 28. The company made a proposal that included freezing wages, paying no bonus, and cutting welfare and benefit cost among others. The management said, "If the union accepts this proposal, it will save the company 310 billion won a year." However, the labor union did not disclose relevant information to its members. The labor union virtually clarified its position that they would not accept the management's proposal.
The labor union demanded the disclosure of wages of and details of welfare programs for GM Korea’s international service personnel (ISP) on the day. However, the company rejected it, saying that employee wages were confidential. The labor union demanded the management position about the closure of Gunsan Plant but the management clearly stated that it was wrong to give an impossible hope to labor union members at Gunsan Plant.
In order to normalize GM Korea, the labor and management should begin to prune cost and tighten their belts, but the discord between the two sides is expected to continue for now. The labor union will hold a rally in front of Cheong Wa Dae (the White House of Korea) in Seoul, demanding that GM Korea scrap the plan to shut down Gunsan Plant. The labor union is also considering sending a team to GM Headquarters in Detroit, the US in protest of GM Korea’s plan to close down Gunsan Plant.
In a CEO’s email message under the name of president Kaher Kazem, the management disclosed that they cut 35% of top executives who are vice presidents or senior managing directors, 45% of executives from the ISP, 50% of all the ISP except executives and 20% of local managers who are directors or team leaders. This downsizing move will successively go on until the end of the third quarter of this year. GM Korea has 100 to 150 executives and about 500 team leaders. GM Korea previously froze team leaders’ salaries this year.
"This means that the management showed its efforts for management normalization and its will not to shift their responsibility for the management crisis onto employees only," an automobile industry official said.
In line with the closure of Gunsan Plant, GM Korea notified 200 non-regular workers of the termination of their labor contracts. Unlike regular workers, non-regular workers receive neither retirement allowances nor severance pays.
Meanwhile, the Korean government organized the 'Gunsan Economic Support Task Force (TF) Team' to prepare measures for the Gunsan region. The special team involves about ten ministries including the Ministry of Strategy and Finance, the Ministry of Trade, Industry and Energy, the Office for Government Policy Coordination, the Ministry of Employment and Labor and the Ministry of Health and Welfare. The TF team will hold a meeting soon to discuss support matters.