Strike to Continue Until Nov. 13
A partial strike by GM Korea’s labor union during the past five days has caused an export loss of about 10,000 vehicles. As the labor union has announced that it will go on a partial strike by Nov. 13 as scheduled, production and export losses are expected to further shoot up.
"The number of vehicles that could not be produced during the five-day partial strike amounts to 12,000," a GM Korea official said on Nov. 11. Considering that an average of 80 to 90 percent of GM Korea's monthly output is exported to the United States, the partial strike resulted in an export loss of about 10,000 units.
GM Korea's labor union downed tools for a total of five days between Oct. 30 and Nov. 10, with workers in the first and second shift each suspending operations for four hours a day. On Nov. 10, the union held a Labor Strike Committee meeting against the management's announcement of an investment suspension and decided to continue the partial strike from Nov. 11 to 13. Unionists will continue to refuse overtime which they started on Oct. 23.
If the partial strike continues through Nov. 13, the carmaker’s export loss can rise to more than 15,000 units. If the labor union decides to go on a full-scale strike at a committee meeting to be held next week, the disruption in production and the consequent drop in exports are expected to rise out of control.
Concern is raised that the strike can put an end to momentum for the normalization of GM Korea management as the export volume of the small sport utility vehicle Trailblazer to the United States drops. The Trailblazer developed mainly by GM Korea has been exported more than 100,000 units so far, with a total of 13,855 units exported in October along with its sister model, the Buick Encore GX.
"If the delivery of the Railblazer is delayed, not only GM Korea but the entire GM network will suffer big damage," a GM Korea official said. "If uncertainty persists due to the strike, GM Headquarters will have to mull over whether it has to allocate additional production volume to GM Korea." Competition for the allocation of popular model production volume is fierce among GM's global production bases including those in Canada. Canada's largest private union, Unifor, recently approved its 1,600 members’ three-year contract with GM with 85 percent approval of its members.
The fact that U.S. President-elect Joe Biden is driving eco-friendly policies is also a burden to GM Korea. It is urgently needed for GM Korea to secure production volume while production of internal combustion engines is maintained so GM Korea fears missing out on the chance due to the strike.
Biden plans to spend US$400 billion on research and development in the clean energy sector. GM with electrification strategy has no choice but to focus its investments on the U.S. market.