By on November 20, 2012

GM wants to thin out its South Korean workforce while shifting production to Europe’s higher-wage locations. Korean unions already see it as a declaration of war.

In the name of “organizational efficiency,” GM’s South Korean unit offers “voluntary retirement” to its 7,000 office workers, Reuters writes. Workers who take the golden parachute will receive up to two years’ salary, two years’ school tuition support and a car voucher worth 10 million Korean won ($9,200).

A GM Korea union spokesman said GM Korea “declared a war” against the union. Two weeks ago, GM said it will exclude South Korea from the production of its next-generation Chevrolet Cruze model. It is widely believed that the beneficiary will be Opel, and what is taken away from the Korean unions is supposed to appease German unions.

GM has a 9.4 percent share from in the South Korean market which is dominated by Hyundai and Kia, controlling around 80 percent. South Korea however is a major production base for GM. About a quarter of GM’s global Chevy production is made here, most if not all Chevrolets sold in Europe are made in Korea.

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6 Comments on “GM Wants South Korean Workers To Go – Voluntarily...”

  • avatar

    GM should do a major public relations campaign in Korea. GM has to drive the point home a good portion of the GM Korea’s prodution is exported to Europe, and unless a relatively small portion of the production is moved to Europe, GM risks getting shut out of the European market completely, and all of those whose jobs are dependent on the European export market will lose their jobs as well.

    • 0 avatar

      Good point. If you want to sell in a particular market, sooner or later you’ll have to manufacture in that market as well.

    • 0 avatar

      “most if not all Chevrolets sold in Europe are made in Korea.”

      Speaking as someone with a background in logistics, wow. That’s about as distant as you can get the factory from the market, and South Korea most likely doesn’t have a major labor cost advantage vs, say Thailand to justify it. If GM is selling Chevrolets in Europe, the most logical place to build them would be a European plant, and if Opel has idle capacity…

  • avatar

    I don’t think anyone in South Korea cares about European jobs at the cost of their own. They see that cars produced in South Korea have (somewhat) allowed GM to pull its tush out of the fire, and in return GM is giving them the finger while trying to secure more Euro bailout money. The relative location of production to sales is irrelevant to the people building them.

    • 0 avatar

      Agree with most of what you say, but wonder what European bailout money you’re talking about. If Germany was awarding bailout money, GM would be snout deep into it already, and Ford would not be closing three plants in Europe.

      Perhaps you haven’t been keeping up with Herr Schmitt’s steady news items on the European auto industry. The EU doesn’t allow bailouts because it favors one country’s industry over another’s. The French of course repeatedly try to thwart the process with about zero success. Gallic logic is an amazing phenomenon, right up there with the gigantic intellectual brainpower running GM, where reality seldom intrudes.

      The reason GM wants to get Opel to build Daewoos is to reduce its fixed costs per vehicle, thereby reducing its overall loss until it can finally shut down most of Opel in 2016.

  • avatar
    Angus McClure

    I don’t normally side with unions. I think most of the reason for unions is from 80 or so years ago when something was sure needed. Having said that and subjected myself to all sorts of flack – I think this is a time when the unions and their resistance is appropriate. I understand what GM is doing and why. I think they probably created the situation in Europe.

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