Take the Cash, Hit the Bricks: Nearly 2,500 Korean Workers Opt for GM's Voluntary Redundancy Package

Matt Posky
by Matt Posky
take the cash hit the bricks nearly 2 500 korean workers opt for gm s voluntary

Union officials have stated that roughly 2,500 workers from General Motors’ South Korean unit have applied for a redundancy package offered as part of the automaker’s comprehensive restructuring of the region. The number represents around 15 percent of total GM staff in the area and should make negotiations with one of the most inflexible workers’ unions on the planet that much easier.

Still, what General Motors plans to do with its remaining South Korean factories is unknown, but it has already announced one closure. This has left many wondering if the automaker will abandon production in the country entirely. Fortunately, the Korean workforce has not responded with violence. In fact, many appear to see the writing on the wall, opting to take a buyout rather than cause a fuss during the restructuring.

GM’s South Korean business is mainly focused on building cars for export. It currently employs 16,000 individuals and endured its fourth straight year of operating losses in 2017. Already damaged by the automaker’s decision to pull the Chevrolet brand from the European market, this year looks to be no better.

“It looks the redundancy program has been well received by workers,” Cho Seong-jae, a senior fellow at the Korea Labor Institute said. “It seems that workers have given up any hope. They are fed up as the Gunsan factory has been underutilized for the past two to three years.”

Corporate documents seen by Reuters seem to indicate GM plans to cut 5,000 South Korean jobs but keep production steady. However, that’s only if the South Korean government agrees to a $2.8 billion financial aid proposal — meaning it might have been a good time for workers to get out with a redundancy package when they did.

The package, which carried an application deadline of March 2nd, provides outgoing employees with three times their annual salary, money for their children’s college tuition, and upwards of $9,000 towards the purchase of a new car. GM urged employees to take the buyout, suggesting a better deal was unlikely to come around ever again. The automaker has already begun negotiations with union members on wages concessions and finding benefits it can cut to minimize cost.

The Gunsan factory that GM intends to shutdow n saw 941 out of roughly 2,000 workers applying for the redundancy package, according to union officials. What happens to the rest of them hasn’t been decided, thought it’s unlikely they or the remaining Korean workforce will fare well if the government doesn’t want to invest in General Motors’ financial aid proposal.

[Image: General Motors]

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  • Peter Gazis Peter Gazis on Mar 06, 2018

    GM sales in Korea down 48% in Febuary FK Korea!

    • See 1 previous
    • Bd2 Bd2 on Mar 07, 2018

      Otoh, "Black Panther" has been breaking box office records in Korea and the US is once again the #1 source for imported beef (overtaking Australia). Some things have more to do with how well/poorly a company (or its subsidiary) or industry is run.

  • Spike_in_Brisbane Spike_in_Brisbane on Mar 06, 2018

    GM became the biggest car manufacturer by making cars people wanted where they wanted them via it's subsidiaries like Holden, Vauxhall, Opel and Daewoo. Now that they are disappearing it will have to convince the rest of the world to buy Chevies and Caddies. Good luck with that!

    • Bd2 Bd2 on Mar 07, 2018

      The Chevy badge was a good thing. When GM took over Daewoo Motors, rebadge kits (to turn their Daewoos into Chevys) were very popular.

  • Doc423 Well said, Jeff.
  • Urlik My online research seems to indicate it’s an issue with the retaining clips failing and allowing the valve spring retainers to come out. This results in the valve dropping into the cylinder.
  • EBFlex Typical Ford. For those keeping track, Ford is up to 44 recalls for the year. Number one recalled manufacturer (yet again) by a wide margin.
  • Lorie Did they completely forget the damn 2.0 ecoboosts that have the class action lawsuit? Guess those of us that had to pay out of pocket for an engine replacement for a fail at 76k miles are out of luck? I will never buy a Ford again.
  • Mncarguy I remember when the Golf came out and all the car magazines raved about it. I bought an early one in the mid level trim, brown with a beige vinyl interior and a stick. I must have blocked out a lot about that car, because the only thing I remember is one day with my wife and infant in the car, the brakes went out! I could use the parking brake and made it home. There must have been other issues (beside an awful dealer who felt like they were doing you a favor even letting you come in for service) because I swore I'd never buy a VW again. I did get a new Beetle and later a Passat. That's another story!