By on September 6, 2019

While Hyundai seems to have miraculously dodged labor strikes in South Korea this year, General Motors does not appear to possess the same good fortune. However, it would be difficult to place the blame squarely on the shoulders of Lady Luck.

GM’s been considering pulling out of the region over financial reasons for quite some time. In 2018, the automaker shuttered one of its four South Korean facilities — citing rising labor costs as the primary culprit. It’s also been losing money in the region for years. Hoping the company could be swayed from abandoning Korea like it did with Europe, the government floated General Motors 850 billion won ($712.85 million) in industrial aid. 

The arrangement was supposed to help keep GM Korea humming for another decade, and the company soon announced tentative plans to invest in new models for the remaining three plants. The deal hinged on Seoul’s willingness to provide financial aid to the Korean unit and a willingness from union groups to accept cost cuts.

Now, union officials are becoming concerned over GM’s presumed unwillingness to provide a clear plan for the Bupyeong Complex after 2022. The factory is currently responsible for manufacturing numerous vehicles (mostly Chevrolet) and their powertrains. Assembly of the Chevrolet Trax will be moved to another nearby facility later this year, leaving a gap in Bupyeong the Korean union fears may be the start of something much worse.

Strikes are scheduled to take place Monday through Wednesday in response to stalled wage talks and concern of another plant shutdown. This would be the first full-scale walkout since GM bought local factories from Daewoo in 2002. The union recently rejected GM’s proposal for a base wage freeze and no bonuses for the second year in a row. Last year, the prospect of no bonuses inspired workers to storm executive offices just to trash them.

“What crazy person will stage a full strike for three days under this economic situation? We are going on a strike because we are desperate,” one GM Korea union leadership official explained to Reuters. “We are fine with no wages, but we want to hear GM’s vision about the Korean unit.”

The automaker’s current plan is to break even in Korea this year — something it said would require union cooperation to pull off. “It is unfortunate that the union decided to go on strike,” GM Korea said in a statement. “The company has been delivering on commitments and we ask the union to do the same for the future of GMK.”

[Image: GM Korea]

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13 Comments on “GM’s South Korean Workers Preparing to Strike...”

  • avatar

    Will this affect the production of Buick SUVs???

  • avatar

    I have to wonder if the poor sales are a result of dumping the Daewoo badge for Chevy, a deliberate and failed attempt to market a single recognizable GM brand around the world.

    Perhaps the failure itself was deliberate. Why deal with rambunctious Korean unions, when anti-suicide nets are so much cheaper to install in China?

    • 0 avatar

      Doubtful, as Chevy rebadge kits were big sellers once GM purchased Daewoo.

      It’s more or less GM’s gross incompetence when it has come to the Korean market and the products built at its plants there.

      W/ having the advantages of being a “domestic” automaker, there is no reason for Lexus to far outsell Cadillac in Korea.

      But granted, the ever increasing wages demanded by Korean auto workers hasn’t helped things (cheaper to build in places like Spain).

  • avatar

    I was under the impression that [South] Korean workers consider preparing to strike as a major part of their job.

  • avatar

    Would PSA consider buying Daewoo from GM (or whatever left of it)?

    • 0 avatar

      Carlos Tavares is a relentless cost-cutter, first at Renault, then cutting enough to make Opel profitable. I doubt he’d mesh (or mess, if you prefer) with the Koreans, but if he decided to take over even one GM plant, I’d lay in a supply of popcorn – it would be quite a show.

  • avatar
    Jeff S

    GM will try to sell Daewoo if labor problems persist but if they cannot find any buyers they might just shut it down and shift production to China or Vietnam.

    • 0 avatar

      >>… they might just shut it down and shift production to China or Vietnam.<<

      I had figured consolidating in China would be the plan, but the POTUS refused to give GM a waver of the tariffs on Chinese cars and car parts. Nam doesn't have the infrastructure to support a large auto plant.

      My first guess would be moving to India, but GM sold one Indian plant to SAIC, which has started production of MG branded cars. GM has been rumored to be in discussions to sell it's Talegaon plant to an EV manufacturer. GM stopped selling cars in India a couple years ago, but retained the Talegaon plant to build for export, because Indian labor is really cheap.

  • avatar

    Barra is the a master at creating global chaos.

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