SEOUL, Sept. 9 (Korea Bizwire) — Unionized workers at GM Korea Co. on Monday staged a full-scale strike for the first time in 22 years as they demand an increase in wages despite warnings from the company’s global headquarters.
Some 8,000 workers participated in the walkout at the plants in Incheon, west of Seoul, and Changwon, 400 kilometers southeast of the capital, and plan to continue to strike through Wednesday.
The union launched four partial strikes last month and has been boycotting overtime work since Aug. 22.
“Unless the company comes up with an improved wage offer, we’ll continue to strike,” a GM Korea union spokesman said. “If the company can’t accept our demand, it should at least explain its future plan to the union.”
Some 2,000 employees at GM Korea’s R&D unit, GM Technical Center Korea (GMTCK), are also expected to join the strike from Tuesday if their wage negotiations with the company later in the day end with no deal.
This is the first time that the GM Korea union has launched a full-scale strike since the automaker became a part of U.S-based auto giant General Motors Co. in 2002.
They staged a full-scale strike in 1997 when the company was under now-defunct Daewoo Group.
The union has been demanding a 5.7-percent hike in basic monthly salary, one and a half months of wages in performance-based pay and a cash bonus worth 6.5 million won (US$5,400) per worker.
GM Korea has balked at the union’s requests, saying that the company is still mired in losses and suffering from declining sales, among other reasons.
From January to August, GM Korea’s sales fell 6.2 percent to 287,540 vehicles from 306,533 units a year earlier.
It posted a net loss of 859 billion won (US$720 million) in 2018 after reporting 3.13 trillion won in accumulated net losses in the 2014-2017 period.
The three-day strike will disrupt production of nearly 10,000 vehicles. Last year, GM Korea manufactured 444,816 units, down 14.3 percent from 519,385 units in 2017.
The strike is casting a pall over GM Korea’s future. During a visit to South Korea last month, GM International Operations Senior Vice President Julian Blissett reportedly said the head office is “disappointed” about the union’s decision to strike and may review the output allocation of its models.
In May 2018, GM and the Korea Development Bank (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.