GM Korea denounces exit ban on CEO Kazem

US carmaker General Motors and its domestic affiliate GM Korea on Monday blamed the South Korean government for handing down another exit ban on the GM Korea chief.

Calling the ban an abuse of power and discrimination against foreign businesses here, the carmaker vowed to take legal countermeasures.

“(The government’s exit ban order) is an arbitrary administrative measure which may lead to an abuse of legal procedures,” said GM Korea in a statement.

“In order to respect the court’s (earlier) decision, it is crucial that (the latest exit ban) be reviewed properly and withdrawn.”

Last month, the Seoul Administrative Court ruled in favor of GM Korea CEO Kaher Kazem, ordering the government to remove the extended exit ban on the business chief who is currently on trial for illegal hiring charges.

But the Incheon District Prosecutors’ Office on Saturday requested an additional exit ban, claiming that the administrative measure is indispensable in lodging an appeal for the ongoing legal dispute.

“We had called for the exit ban earlier, considering the possibility that CEO Kazem may not make his presence at court,” said a prosecutorial official.

“As Kazem won the first trial, the Justice Ministry is now considering an appeal case, which is why an effective exit ban is still necessary.”

GM Korea lashed back and vowed to file another lawsuit at the Seoul Administrative Court, demanding that the exit ban be removed immediately.

“The abuse of judicial power by the Justice Ministry and the Incheon prosecutors seriously harm the credibility that foreign companies have for Korea’s judicial system,” the carmaker said, adding that the repeated litigations are a waste of public resources.

The company also underlined that CEO Kazem made a business trip to the GM headquarters in Detroit last month, after his initial exit ban was lifted, and returned swiftly and voluntarily. The purpose of the given trip was to discuss ways to secure automotive semiconductors, which are running low across the world amid a prolonged supply shortage.

The Australian CEO of GM Korea is suspected of violating labor laws after he hired some 1,719 workers from 24 subcontractors at the carmaker’s plants from September 2017 until December last year.

Meanwhile, the US-based carmaker is looking ahead to another round of labor-management disputes this year, as its labor union is calling for a wage hike and other financial compensations amid growing anxiety that some of the local plants may shut down in the upcoming years.

The unionists’ demands include an increase of 99,000 won ($88.86) in their monthly base salary, 10 million won or more in performance-related pay and incentives, and a revised manufacturing portfolio for some of the struggling plants.

The management, however, has remained reluctant to embrace such calls, especially in light of the global semiconductor shortage and the consecutive setback in manufacturing schedules.

Last month, the carmaker had to temporarily suspend its two plants in Bupyeong, Incheon. Even after it resumed production, the operational rate remained at 50 percent of the conventional figures.

For the entire month in April, GM Korea sold a combined of 21,455 units, of which export volumes accounted for 15,985 units or 74.5 percent. The relatively weak domestic sales were mostly spearheaded by the compact SUV Chevrolet Trailblazer and the Spark minicar.

“Despite challenges such as the COVID-19 pandemic and the chip shortage, popular models such as Spark and Trailblazer have successfully made a presence in the domestic market,” said Vice President Cesar Toledo.

By Bae Hyun-jung (tellme@heraldcorp.com)