The labor union of General Motors (GM) Korea has stirred up a controversy by putting forward an unreasonable demand that the government pay on its behalf monthly livelihood allowance to workers who chose to remain in the closed Gunsan plant.
When GM Korea shut down the Gunsan plant last year, an agreement was made that the subsistence allowance for the workers would be paid by the government for the first six months and by the labor union and management for an additional 24 months.
However, the labor union is seeking to breach the deal and change the unpaid leave granted to the workers to paid leave so that it can get 800 million won (US$713,649) a month from the government.
The labor union of GM Korea held an extraordinary representative meeting on Jan. 22 and included the livelihood allowance issue in its wage raise special request for this year, according to industry sources on Jan. 27. It is planning to receive additional government subsidies again by changing the workers’ status from unpaid to paid using a loophole in the employment promotion subsidies system.
GM Korea, which was under threat of bankruptcy last year, closed down the Gunsan plant, whose operation rate fell to 20 percent due to sluggish sales, in exchange for receiving US$7.10 billion (7.96 trillion won) of financial support from the GM headquarters in the United States and the Korea Development Bank. Under the program, 400 workers, who rejected voluntary retirement and decided to remain in the Gunsan plant, were granted an unpaid leave and would get the 1.8 million won (US$1,606) allowance a month from the government for the first six months and 2.25 million won (US$2,007) a month from the labor union and management (50:50) for additional 24 months. The government’s support ended at the end of November last year. The company has been providing 1.13 million won (US$1,004) to the workers per person a month from Jan. 10.
However, the labor union has not been keeping its end of the bargain. This is because it fears a backlash from union members who would have to pay more than double the monthly average union dues when it offers the living expenses to the remaining workers in the Gunsan plant.
An official who is well acquainted with GM Korea said, “The company focused on management recovery at the cost of the workers in the Gunsan plant but the labor union broke its promise. Some inside the company say that the union killed the dog after hunting was over.”