GM Korea is still undergoing a very rough time. After near bankruptcy, the entity has seen sales slump, and now, we could see its workers strike. The union voted to strike over GM Korea’s planned research and development spinoff, the Korea Herald reported Tuesday.
The subsidiary plans to roll its R&D operations into a new corporation separate from GM Korea, which the union said is the first move towards the long-term goal of exiting the country entirely. Eventually, union members believe GM Korea will cease building cars and only operate a technical center. 78 percent of the 10,234-member GM Korea union agreed to walk out on the job in opposition to the plan.
Last Friday, GM Korea’s board of directors gave the go-ahead to bring the spinoff to a vote, and GM Korea President and Chief Executive Kaher Kazem said it’s the right move to strengthen the entire organization’s operations in the country. In a letter to employees, he wrote, “The establishment of a dedicated GM Korea Technical Center, Ltd. is an important development in continuing to strengthen our organization and to position our company in the best possible way forward with focused leadership to more effectively respond to and secure and execute global engineering projects.”
The Korea Technical Center would handle design and development work for new models, and Kazem added it will strengthen GM Korea’s export business and develop General Motors’ global compact vehicles crossovers and SUVs.
While the board gave the green light for a vote, the Korean Development Bank has filed an injunction against the shareholders’ meeting with a local court. The KDB, GM Korea’s second-largest shareholder, said it was not made aware of the plans. Additionally, such a spinoff was not part of a bailout agreement the KDB and GM reached earlier this year.