Another Uncertainty Lying Ahead
GM Korea has spun off its R&D functions and formed a separate company in a blitzkrieg manner. Yet the move has generated a backlash from unionized GM Korea workers, the Korea Development Bank and the Incheon Ciy government.
GM Korea's workers have voted to go on strike as they see the spin-off as the company's move to leave the South Korean market after laying off its workers.
In addition, the Korea Development Bank (KDB), which is the second-largest shareholder of the carmaker, is planning to respond through legal means, while the Incheon City government is considering repossessing the land provided to GM Korea.
“We are currently considering getting back the proving ground of GM Korea,” a city official said on October 21, adding, “A lot of people are concerned about the R&D unit separation, and we will repossess the land we offered to GM Korea if citizens, including the company's unionized workers, deem it necessary.”
In the meantime, the unionized workers are planning to go on general strike in both Changwon and Bupyeong. According to them, the R&D unit separation is intended for a layoff rather than a business recovery.
The KDB also mentioned that the shareholders meeting held to approve the spin-off plan had procedural problems and it would take legal measures.
Despite a vehement opposition, GM Korea separated the R&D unit at a rapid pace. GM International President Barry Engle announced the spin-off plan on July 20 and the board voted for it this month. GM Korea is claiming that the separation will result in more product development projects in South Korea and its greater presence in GM.