Wage negotiations between GM Korea management and the local labor union are progressing, with the labor union agreeing to the latest wage agreement.
In a recent vote, the labor union representing GM Korea workers gained a 66-percent approval vote held over the last two days, with roughly 4,600 union members of the 7,012 total workers voting in favor of the new agreement.
GM Korea labor and management previously held a meeting on May 27th, but failed to come to an agreement. GM Korea workers rejected an offer from management that included a 30,000-won ($25.76 at current exchange rates) increase to the base worker salary, and 4.5 million won ($3,864 at current exchange rates) in incentives. After further negotiations, management also added in a car maintenance coupon, gift coupons, and advance payment of incentives, sweetening the deal for workers and enticing approval.
The new labor agreement arrives amid widespread production difficulties stemming by the ongoing global microchip shortage. It’s estimated that the chip shortage has reduced GM Korea production figures by 80,000 units through the first half of the 2021 calendar year, and while production facilities continue to operate, they do so at lowered capacity.
GM Korea posted a drop in sales this year, losing just under 20 percent in domestic sales. The sales dip follows a sales slump experienced throughout the 2020 calendar year due to the COVID-19 pandemic.
|MARKET||JUNE 21 SHARE||JUNE 20 SHARE||YTD 21 / YTD 20||YTD 21||YTD 20||YTD 21 SHARE||YTD 20 SHARE|
However, despite the difficulties of the microchip shortage and lost sales, demand for GM Korea-built vehicles remains high in the U.S., which serves as GM Korea’s primary export market. The GM Korea-built Chevy Trailblazer and Buick Encore GX models have both shown success in that regard.
|MODEL||Q2 21 / Q2 20||Q2 21||Q2 20||YTD 21 / YTD 20||YTD 21||YTD 20|
|BUICK ENCORE GX||+183.54%||26,244||9,256||+276.82%||44,679||11,857|
Looking ahead, General Motors’ recent recall of all models of the Chevy Bolt EV and Bolt EUV for potentially dangerous batteries has delayed the launch of the latest 2022 model-year vehicles in the Korean market. However, the recall could be seen as potentially beneficial as the battery packs will be fixed ahead of the rollout.