Automakers in South Korea have become accustomed to labor strikes during annual wage negotiations, and GM Korea is no different. Fifteen-thousand unionised workers in GM Korea’s plant intend to vote on whether to go on strike for a fourth consecutive year today and tomorrow.
Last December, General Motors decided to halt the sales of Chevrolet-branded vehicles in Europe by 2015. Since GM Korea produces most of those Chevrolet vehicles, the South Korean plant took a major hit. A potential strike could lead to additional production cuts for the automaker’s Asian manufacturing bases.
According to GM Korea CEO, Sergio Rocha, the repercussions of a strike could be far worse than imagined. “We have seen such (strike) decisions boomerang on us. If a loss in production is incurred again this year due to strikes, the result could be much worse than we can imagine.”
GM Korea and its labor union commenced annual wage negotiations in April 2014 but have been debating over wage increases and future production plans since then. “GM Korea is at a critical juncture,” added Rocha. “While there are a number of issues that have weakened our competitiveness such as soaring costs, and labor conflicts, losses as the result of strike actions during previous negotiations represent one of the biggest.”