General Motors Korea has reached a wage deal with its unionized workers after the employees voted in favor of a strike earlier this month over salary amounts and an outdated wage scheme, Reuters reports.
GM Korea’s 14,016 workers voted to walk out for a fourth consecutive year earlier this month unless the automaker agreed to revamp its wage scheme to comply with a new Korean supreme court ruling that says regular bonuses should be counted in base wages. This allows for the employees to receive better overtime and severance pay, as those amounts are adjusted depending on how high the base wage is.
The company agreed to pay each worker 10.5 million won ($10,200) in bonuses and incentives and raise the basic wage by 63,000 won ($61.39). GM Korea told Reuters the deal was reached in a “smooth and peaceful way.”
Production at GM Korea’s plants tapered off immensely following GM’s decision to pull Chevrolet out of Europe, cutting hours and jobs at the facilities. GM Korea agreed to build the next-generation, D2XX-based Cruze at the country’s Gunsan plant as part of the wage deal, but the car won’t be built until 2017, meaning the facility will be running under capacity until then.
“We can’t win it all. We will leave the deal to the judgment of our union members,” Jang Kyung-dae, a Korean union spokesman, told Reuters.
The deal comes after GM Korea CEO Sergio Rochas warned workers in favor of striking to “stop this vicious cycle before it’s too late,” as it could lead to further production cuts down the line.