Awkward Situation
The conflict over restructuring between the unions and management of GM Korea is deepening. It stems from the fact that the labor union is against job cuts amid a reduction in manufacturing output. Because of the union’s opposition, the company decided to reconsider switching over to a new one-shift system in its plant in Gunsan City, North Jeolla Province.
Output at the Korean unit of GM has continued to decline in line with General Motors’s global strategies. This shows that manufacturing conditions in the country are getting worse. Thus, workers are worried over additional downsizing in the future.
According to GM Korea on January 27, four representatives of labor and management held a meeting on January 26 and agreed to reconsider the company’s plan to change from a two-shift to one-shift system at the Gunsan plant.
As the changeover from a two-shift to one-shift system was postponed tentatively with the agreement, the scale of downsizing is expected to decrease. A union member of GM Korea said, “Job cuts are inevitable because of reduced production. We will settle the situation through negotiations.”
Management maintained a cautious attitude toward the issue. An official at GM Korea commented, “Since labor and management promised to be actively engaged in negotiations, it takes time to normalize management of the Gunsan plant.”
Previously, the auto maker suggested a one-shift system and 1,100 job cuts on account of output cuts at the Jan. 23 meeting at the Gunsan plant. Currently, 3,100 people consisting of 1,700 full-time workers, 1,100 subcontractors, and 300 office employees are working at the plant.
The factory is reportedly operating at 60 percent capacity, because of a drastic reduction in factory operating rates. The phenomenon is attributable to a reduced demand for the vehicles that are produced at the Gunsan plant from the European market.
In fact, 142,000 cars were produced at the plant last year, nearly half the number for 2011 (268,670 units). The production target for 2014 has been set at 100,180 units, down 29.5% from a year ago.