By on March 5, 2018

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 shutdown 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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18 Comments on “Take the Cash, Hit the Bricks: Nearly 2,500 Korean Workers Opt for GM’s Voluntary Redundancy Package...”


  • avatar

    Look at that picture. They were making the Cruze and the old gen Daewoo Lacetti at the same time, at the same factory?!

  • avatar
    IBx1

    3 years’ salary, tuition assistance, and going halfsies on a new car? Talk about striking gold!

    • 0 avatar
      NN

      “The Art of the Deal” by GM needs to be written!

      If this is the demand the Koreans make for closing factories, you can bet GM (and all other non-Korean brands) will be gone for good from manufacturing there.

  • avatar
    agroal

    Now that the ungrateful appeasing South has been deluded into becoming BFF with the lunatic from the North by marching arm in arm at the Olympics, isn’t it time to bring the 38K US troops still defending the South home? After 70 years defending them and allowing them free access to our markets while effectively blocking us from theirs. The carcass of dead empires is the result of clinging to outdated treaties.

    • 0 avatar
      Arthur Dailey

      @agroal, you should indeed check your facts. Did you not realize that South Korea sent hundreds of thousands of combat troops to assist the Americans during the Vietnamese War?

      • 0 avatar
        gasser

        Vietnam???? That was 50 years ago. We need to live in the present.

      • 0 avatar
        dejal1

        Though I can’t find the quote. Jim Rice, Boston Red Sox Hall of Famer supposedly once said when asked about his friends on the team said,

        “Friends? These were my business associates”. As is the US + South Korea. South Korea + Russia, etc….

        As I don’t believe Canada and the US are friends. We both have mutual interests where interaction is beneficial to both parties. Other than that, what else is there? I have no love or care for Canadians. If it wasn’t beneficial for the US to interact with Canada, Canada could disappear and I would barely notice.

    • 0 avatar
      jacob_coulter

      Don’t be silly, we don’t have the resources to defend our own border, instead we have to help defend South Korea’s border.

      Maybe in another 60 years they can stand on their own two feet.

      • 0 avatar
        Arthur Dailey

        The USA has trouble ‘defending’ its border with Mexico. Imagine having to share an even larger border with Russia? Could be back to 49 states?

    • 0 avatar
      Guitar man

      The American troops weren’t invited. They invited themselves.

    • 0 avatar
      bd2

      @agroal

      Think you need to stop watching Faux News or reading Breitbart.

      The SKoreans detest the “little fat boy” – but that doesn’t mean that they don’t care for the people from up North.

      Also, SKorea pays for a good portion of the cost of the 38k troops, including paying for a new base south of Seoul and the US keeps troops there for geo-political reasons as well (same reason the US keeps troops in Japan, Europe and elsewhere).

      And need to get with the times – there were no trade barriers for locally produced GM Korea models and the import tariff was done away with when the FTA was put into place (only thing remaining being the “chicken tax” on any truck imports to the US – which will slowly be phased out).

  • avatar
    Peter Gazis

    GM sales in Korea down 48% in Febuary

    FK Korea!

    • 0 avatar
      bd2

      That’s b/c of the fear that GM will pull out – meaning no more after-purchase service, etc.

      Would you buy something from a retailer that may close up shop?

      Anyhow, Mercedes has now taken the #3 sales spot.

    • 0 avatar
      bd2

      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.

  • avatar
    Spike_in_Brisbane

    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!

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