Late last week, workers at GM’s South Korean manufacturing operations approved an annual wage deal. The contract follows 13 days of partial strikes that caused production issues at GM Korea’s manufacturing base, which manufactures roughly 40 percent of Chevrolet vehicles sold globally.
The deal, according to union spokesman Choi Jong-hak, was approved by 54.3 percent of union workers, and includes bonuses of 10 million Won ($9,000 USD) along with the promise of no layoffs.
General Motors refused to provide details of the new contract to the Chicago Tribune.
During negotiations, the union raised concerns of GM scaling down the size of its manufacturing base in the country. Outside of production functions, South Korea also fulfills global engineering and design operations for GM, mostly surrounding mini, subcompact, and small Chevrolets such as the Spark, Aveo/Sonic, and Cruze, respectively. The union’s concerns surface just as GM announced in late 2012 that it will move production of its Cruze compact car from South Korea, sparking fears among Korean workers about the possibility of a broader restructuring. Conflicting with those reports was a General Motors announcement in March of 2013 to invest over $7 billion in its South Korea operations.
At the time, General Motors Chief Executive Officer Dan Akerson reflected on the decision to relocate Cruze production, citing the ongoing wage fight with the union, which would make it even more expensive to produce vehicles in South Korea. It’s been widely suggested that General Motors management considers Korea’s union to be the most uncooperative of any of its manufacturing partners. The association, for instance, struck for 124 hours from July 4 to July 23 — the longest in a decade since the longest walkout in history years before. The stint resulted in a manufacturing loss of over 40,000 vehicles.
GM Korea exported or sold domestically 2.07 million vehicles in 2012. The manufacturing base supplies most Chevrolet-branded cars to Europe, among surrounding geographic areas, and is currently of vital importance to GM on a global basis, especially as the automaker strives to increase Chevrolet sales in Europe. Simultaneously, the unit plays a vital role in the South Korean economy, as it’s the nation’s third-largest automaker following Hyundai and Kia.