Wage Negotiations Settled
GM Korea has cleared one of the major hurdles for 2021 by wrapping up wage negotiations.
The GM Korea labor union endorsed the second provisional wage agreement with a 65.7 percent approval rate in a vote held for two days from Aug. 23.
GM Korea's labor and management had a tug-of-war for about three months from an ice-breaking meeting on May 27. The two sides failed to wrap up talks before the summer vacation as they originally wanted, but finally reached the agreement before the Chuseok holiday.
GM Korea is suffering a severe slump in sales this year. It badly needed an early conclusion of the wage negotiations for a stable production of cars for overseas markets.
In the first seven months of 2021, GM Korea posted a 13.3 percent drop in sales -- a 20.9 percent drop in domestic sales and a 10.9 percent drop in exports. Considering that its business performance in 2020 significantly worsened compared to 2019 due to the outbreak of the new coronavirus, an additional decrease in its sales in 2021 will deal a fatal blow to the company.
GM Korea can hardly expect a sharp rebound in domestic sales for the time being in the face of a series of new model launches by competitors. The only breakthrough is exports. Fortunately, demand is strong in the United States, GM Korea’s main export market. A company official said that export demand is large enough to make up for the past sluggish performance.
"The Trailblazer and its brother model Buick Encore GX produced by GM Korea are in high demand in the U.S. car market," the official said. "The Trax, an old model, is also in constant demand. Small SUVs are enjoying strong sales in the United States."
GM’s recent decision to recall the Bolt EV and the Bolt EUV is seen as a blessing in disguise. The move has delayed GM Korea's launch of the Bolt EUV in the Korean market, but it is better for GM Korea to launch the model in Korea after its problem has been fixed in the United States in advance, industry watchers say.