GM Korea’s labor union will go on all-out strike from Sept. 9 to 11. It will stop its members from entering factories and working overtime during the strike period. This is the first time that the GM Korea union has launched a full-scale strike since the automaker became a part of U.S-based auto giant General Motors Co. in 2002. They staged a full-scale strike in 1997 when the company was under now-defunct Daewoo Group.
The union said on Sept. 8, “We can call off the strike if the company comes up with a proposal.” It cites the management’s refusal to hike wages as the cause of the all-out strike. Since starting discussions over a wage and collective bargaining agreement on July 9, the union has demanded a 5.70 percent, or 123,526 won (US$103.49) raise in basic salary, 10.23 million won (US$8,569) in performance bonus and 6.50 million won (US$5,445) in encouragement bonus per worker.
However, GM Korea has refused to accept the union’s demands because the company needs to turn a profit this year. At a recent Traverse sport utility vehicle (SUV) launch event, GM Korea CEO Kaher Kazem said, “The union also needs to keep the promise it made last year.”
Last year, GM Korea’s union agreed that it will increase wages depending on the company’s profitability in the future and the wage increase will not surpass the growth of consumer prices a year ago. The Korean unit of the U.S. automaker recorded a loss for five years in a row from 2014 to 2018 and its accumulated net losses come to 4.45 trillion won (US$3.73 billion).
The prevailing view in the industry is also that it is hard to understand why GM Korea is staging an all-out strike. The management and union of Hyundai Motor Co., thede facto leader in the South Korean car industry, have reached a tentative wage and collective bargaining agreement without a strike for the first time in eight years and the GM headquarters already sent out a warning to GM Korea’s union several times. In fact, GM International Operations Senior Vice President Julian Blissett said, “The parent company in the U.S. is very disappointed about the union's decision to strike and is keeping an eye on the situation.”