SEOUL, Aug. 22 (Korea Bizwire) — A General Motors Co. executive on Thursday urged employees at GM Korea Co. to help the South Korean unit get back on track this year amid weak sales and strikes.
During his visit to GM Korea’s main Bupyeong plant in Incheon, just west of Seoul, Julian Blissett, president of GM International, asked GM Korea workers to focus on helping the company achieve competitiveness and profitability.
The visit comes after two days of GM Korea union’s four-hour strikes on Tuesday and Wednesday at the company’s plants.
The 10,000-member union demanded a 5.7 percent hike in basic salary, performance-based bonuses worth 2 1/2 months of wages and a cash bonus worth 6.5 million won (US$5,400) per worker, which was rejected by the company.
“The company explained that it is difficult to accept the union’s requests for a salary increase and the payment of performance bonuses due to the unfavorable business environment both internally and externally, and the fact that the company has not yet returned to profitability,” GM Korea said.
GM Korea has three plants — two in Incheon and one in Changwon, 400 kilometers south of Seoul.
Their combined output capacity reaches about 600,000 units. The company shut down a plant in Gunsan, 270 km south of Seoul, in May last year due to a low utilization rate.
From January to July, the carmaker’s sales fell 7.2 percent to 263,023 vehicles from 283,432 units a year earlier.
It posted a net loss of 859 billion won (US$738 million) in 2018 after reporting 3.13 trillion won in accumulated net losses in the 2014-2017 period.
To revive lackluster sales, GM plans to introduce 15 new vehicles to the Korean market for the five years through 2023. It launched the U.S.-made Equinox and the upgraded Chevrolet Spark minicar last year.
The Detroit carmaker plans to launch the midsize Colorado pickup truck in Korea next week and the Traverse SUV early next month. It is also considering adding the full-size Tahoe SUV to the lineup.
In May last year, GM and the KDB signed a binding agreement that will permit a combined 7.7 trillion-won lifeline — 6.9 trillion won from GM and 810 billion won from the KDB — to keep the Korean unit afloat. GM owns a 77 percent stake in GM Korea.
Under the deal, GM is banned from selling any of its stake in GM Korea before 2023 and is required to keep its holding in the unit above 35 percent until 2028.