GM Korea downsizing faces union protest

Early retirement plan comes amid rumors on relocation of production bases


GM Korea’s recent policy to downsize its manpower structure via a voluntary redundancy program has been inviting backlash from the carmaker’s labor union.

Unionized workers at the automaker are set to stage a series of protests against the early retirement scheme, which has allegedly been initiated by new GM Korea CEO Sergio Rocha, according to sources.

The Korean unit of U.S.-based General Motors is considering reducing the number of senior employees by around 500 through the early retirement scheme.

Since GM Korea’s establishment in 2002, there has been one other time the company adopted a voluntary redundancy program, in 2009.

“The scheme comes amid the situation that workers are casting worries over a feasible speculation that GM may relocate its Asia’s automobile manufacturing base in Korea to a foreign country,” an unionized worker said.

He added that the union is mapping out countermeasures, such as staging a large-scale protest, against the management-led restructuring plan.

As the voluntary redundancy program is aimed at slashing the payrolls of white-collar jobs, more and more senior employees including managerial staffers are applying for membership to the union, which is composed of many workers on vehicle production lines, according to the union.

Company spokespeople denied the allegation that GM Korea, burdened with high production costs, is seeking to reduce costs and build up revenue by promoting early retirements.

“We are giving workers an opportunity to choose. And the program will be a new chance for junior-level employees below manager position, and invigorate the company as a whole,” a spokesman said.

The automaker’s overhaul project came only three months after its new CEO took over. Sergio Rocha, former president and managing director of GM Argentina, Uruguay and Paraguay, joined the company as the new CEO of GM Korea in March.

In the meantime, the rumor of base-relocation has resurfaced as GM Korea has been far lagging behind Hyundai Motor and Kia Motors in market share, despite changing the company name from GM Daewoo to GM Korea and introducing the Chevrolet brand in 2011.

Following earlier speculation that GM Korea’s core production facilities would be relocated to Europe, some observers now see Chinese cities like Shanghai as candidates.

“Since late 2009 when management was seeking to drop the brand of GM Daewoo, predictions have been rampant in the market that GM could possibly pull its position out of Korea during the late stages of the Lee Myung-bak administration,” a figure close to the company said.

He alleged that the introduction of Chevrolet was a preliminary step to close down the Bupyeong factory in Incheon.

“It would be easier for the company to withdraw its investment as the nation has gone into a phase of political power transfer (several months ahead of the presidential election in December),” he said.

By Kim Yon-se (kys@heraldcorp.com)