Almost 2,500 GM Korea workers apply for voluntary redundancy package

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Almost 2,500 workers at General Motors’ S. Korean unit, equivalent to 15 percent of its staff, have applied for a redundancy package that the US automaker is offering as part of a drastic restructuring, union officials said.

The relatively strong number of applicants could make GM’s task of negotiating with the unions and the government somewhat easier, although the automaker still faces many obstacles after saying last month it would close one S. Korean plant and was weighing the fate of its three remaining factories.

“It looks the redundancy program has been well received by workers,” said Cho Seong-jae, a senior fellow at the Korea Labor Institute.

“It seems that workers have given up any hope. They are fed up as the Gunsan factory has been underutilized for the past two to three years,” he added.

The main gate to GM Korea's Gunsan factory in Gunsan, S. Korea, February 13, 2018. /VCG Photo

The number of applicants contrasts with past militant action by unions in S. Korea’s auto sector. In 2001, Daewoo Motors laid off 1,750 workers, triggering violent clashes with riot police. Daewoo Motors’ assets were sold to GM the next year.

GM’s S. Korean unit, which is geared primarily towards building cars for export and employs some 16,000 people, is expected to have made a fourth straight year of operating losses last year, battered by the automaker’s decision to pull the Chevy brand from Europe in 2013.

A GM document seen by Reuters showed that over the longer-term, the US automaker aims to cut 5,000 S. Korean jobs but keep production steady if Seoul agrees to a 2.8-billion-US-dollar financial aid proposal for the loss-making operation.

How amenable S. Korea’s government will be towards GM’s proposal is unclear. The planned closure of the Gunsan plant is, however, a setback for President Moon Jae-in who has made job creation a key policy goal.

Source(s): Reuters