GM's Rescue Plan For Opel Could Trigger Korean War

Bertel Schmitt
by Bertel Schmitt

When we heard from Reuters about GM’s possible plan to shift production from its South Korean former Daewoo plants to Europe, we didn’t think that would be highly appreciated in South Korea. After duly reporting that there could be a deal afoot to mollify the German and European steelworkers union with jobs taken away from South Korea, we opined: Let’s see what the militant South Korean unions have to say about that.”

We did not have to wait long. The unions in South Korea already threaten war, and when they say war, they mean war.

In an update to their detailed and well-researched article, the Reuters reporters write:

Moves to shift production could ignite protests from a militant labour union at GM Korea, which launched its first strike in three years last year. Choi Jong-hak, a spokesman for GM Korea’s labor union, warned the union would “wage a war” if GM shifts output to Europe.

He said GM had already been shifting some production from South Korea to emerging markets with cheaper labour, causing “serious job insecurity.”

The plan is spearheaded by GM vice chairman and chairman of Opel’s supervisory board Steve Girsky. Reuters says Girsky has “close ties to GM’s largest union.” That is putting it mildly. Girsky worked as an adviser to the UAW during the pre-bankruptcy times and was the UAW’s man on the GM board. He should know the unions better. He could ask his joint venture partners at China’s SAIC. When SAIC pulled out of Ssanyong, literally all hell broke loose.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • GS650G GS650G on Jan 12, 2012

    After having a small war at the plant do these workers expect to just go back to making cars and be happy about it?

  • Acuraandy Acuraandy on Jan 12, 2012

    Well, North Korea already (and has for decades) hates the US. Now Mother General wants to piss off the South Koreans by axing jobs? I'm saying this tongue-and-cheek, but they may reunify because of this. GM's timing could've been better. With a new regime in NK, and their justified desire for reunification ala Germany, this might be their poster child. A pissed off unified Korea=NOT GOOD. THIS IS A BAD IDEA, GM. VERY BAD.

  • Jhott997 Jhott997 on Jan 12, 2012

    THIS is what excess capacity in the industry, and specifically at GM, looks like. This is not going end nicely for GM-DAT, Opel or GM LLC for that matter. Remember that business about liquidation a few years back? It didn't happen then but it will happen eventually. The market will speak.

  • Ppxhbqt Ppxhbqt on Jan 14, 2012

    Hyundai-Kia's capacity problem solved. Makes sense to me.

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